KUALA LUMPUR: Snacks and candy manufacturer Cocoaland Holdings Bhd has decided to reject Navis Asia Fund VII, LP’s takeover offer of RM377.52 million or RM2.20 per share.

In a filing with Bursa Malaysia yesterday, Cocoaland said its board of directors had deliberated on the proposed acquisition by fund manager Navis Asia VII Management Co Ltd, who made the offer on behalf of Navis Asia Fund VII, and “unanimously rejected the offer”.

Last Friday, Cocoaland (fundamental: 2.5; valuation: 1.4) said it had received a “non-binding indicative offer letter” from Navis Asia VII to acquire all its assets and liabilitites. The offer price of the acquisition was not disclosed at that time, and the counter was suspended from trading until 5pm yesterday; it will resume trading today.

In a separate filing yesterday, Cocoaland saw its net profit more than double to RM8.01 million or 4.67 sen per share for the first quarter ended March (1QFY15) from RM3.41 million or 1.99 sen per share a year ago, mainly on increased trading volume from its contract manufacturing of hard candy production.

Revenue grew only 14.32% to RM67.74 million in 1QFY15 from RM59.25 million last year, but lower advertisement expense incurred and lower impairment of receivables also facilitated a better profit margin for the group, the filing showed.

Cocoaland said its trading segment registered higher growth due to higher demand for gummies and snacks from overseas.

Moving forward, the group’s management said the implementation of the goods and services tax is expected to lower retail spending by local consumers after April this year, due to price increases of some goods and services.

“The board and management will monitor proactively the changing economic dynamics and take appropriate actions to meet these challenges,” the group said.

Cocoaland was last traded at RM2.06 per share, with a market capitalisation of RM353.5 million.

This article first appeared in The Edge Financial Daily, on May 26, 2015.