Cocoaland rises after confirming it is in talks with EQT Partners

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KUALA LUMPUR (Apr 6): Cocoaland Holdings Bhd rose as much as 10 sen or 5.16% to RM2.04 after it confirmed a report that it is in discussion with Swedish private equity group EQT Partners for potential investments in the confectionery manufacturer.

At 3.38 pm, Cocoaland (fundamental: 2.5; valuation: 1.4) pared gains to trade at RM2, up 6 sen or 3.09% with some 934,900 shares done. It was one of the top gainers across the local bourse today. The current price gives it a market capitalisation of RM343.2 million.

In a filing to Bursa Malaysia last Friday, the company said its major shareholder Leverage Success Sdn Bhd is in preliminary discussions with EQT for various investment possibilities in Cocoaland.

These investment possibilities include, but are not limited to, the acquisition of a majority or controlling interest, takeover or acquisition of the entire part of the group’s business operation, according to Cocoaland.

The group said that to date, no definitive and conclusive terms have been agreed upon between the parties.

Quoting sources, a news weekly reported last Friday (Apr 3) that EQT is mulling a takeover of Cocoaland at RM1.80 per share, which translates to a price tag of RM309 million for the entire company.

Two other major shareholders of Cocoaland are Leverage Success (38.04%) and Fraser & Neave Holdings Bhd (27.19%).

(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.)