Cocoaland rejects RM377.52m takeover offer from Navis Asia

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KUALA LUMPUR (May 25): Snacks and candies manufacturer Cocoaland Holdings Bhd today announced that it has decided to reject Navis Asia Fund VII, LP's takeover offer of RM377.52 million or RM2.20 per share.  

In a brief statement to the bourse today, Cocoaland said its board of directors have deliberated on the proposed acquisition by Navis Asia VII Management Company Ltd, who made the offer on behalf of Navis Asia Fund VII, and "unanimously rejected the offer".

"The offer price for the proposed acquisition was RM377.52 million (RM2.20 per share)," it added.

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 back then, and the counter was suspended from trading until 5pm on Monday; it will resume trading tomorrow.

In a separate filing today, Cocoaland released its first financial quarter ended Mar 31, 2015 (1QFY15) results, which saw its net profit more than doubled to RM8.01 million or 4.67 sen per share 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 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 (GST) is expected to lower retail spending by local consumers after April 2015, 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.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)