KUALA LUMPUR: High-precision plastic components maker Ge-Shen Corp Bhd, whose share price has climbed 64% since mid-March, has received a mandatory takeover offer from Pelita Niagamas Sdn Bhd (PNSB) at 81 sen a share in cash.

The mandatory takeover offer was triggered after PNSB swept up 29.5 million shares of 50 sen each in Ge-Shen or 38.36% of Ge-Shen’s issued capital for RM23.9 million or 81 sen per share in cash via direct business transactions yesterday.

This increased PNSB’s stake to 52.67%, with 40.5 million Ge-Shen shares.

PNSB is also holding 25 million or 83.33% of Ge-Shen’s redeemable convertible preference shares (Ge-Shen RCPS) of 1 sen each, according to a notice of the mandatory takeover offer from M&A Securities Sdn Bhd on behalf of PNSB, with Bursa Malaysia yesterday.

It is also offering to acquire all the remaining Ge-Shen RCPS in the market at 81 sen a share — also to be fully-satisfied in cash — and represents an implied premium of 21 sen or 35% to the issue price of the RCPS of 60 sen apiece when they were issued on April 17.

PNSB is controlled by Chan Choong Kong and his spouse Chan Boon Hwee. The duo are the ultimate offerors in this deal.

The offer is not conditional upon any minimum level of acceptances, as PNSB already holds more than 50% of the voting shares in Ge-Shen, the notice read.

PNSB intends to maintain the listing status of Ge-Shen. The offer will remain open for acceptance until 5pm, for a period of not less than 21 days from yesterday.

Shares in Ge-Shen closed down 9.52% to 86 sen yesterday following the mandatory takeover offer, giving it a market capitalisation of RM66.53 million. In mid-March, the shares were trading at about 50 sen a share.

This article first appeared in digitaledge Daily, on August 12, 2015.