KUALA LUMPUR: Confectionery manufacturer Cocoaland Holdings Bhd said Hong Kong-listed First Pacific Co Ltd has aborted a plan to take over its business.

In a filing with Bursa Malaysia yesterday, Cocoaland said it received a letter dated July 19, 2015 from First Pacific withdrawing its intention to acquire all the business and undertaking of Cocoaland.

This follows the completion of a due diligence exercise by First Pacific, that the strategic fit offered by Cocoaland differs from what First Pacific had envisaged.

"Accordingly, the proposal is aborted," said Cocoaland.

Shares in Cocoaland (fundamental: 2.8; valuation: 2) fell as much as 16.7% to an intraday low of RM2 yesterday, before closing down 15.42% to RM2.03. Its market capitalisation stood at RM353.5 million.

Cocoaland on June 2, 2015, announced that it had received an indicative non-binding proposal from First Pacific, outlining a proposal to acquire all the business and undertaking, including all the assets and liabilities, of Cocoaland for RM463.32 million cash or RM2.70 per share.

First Pacific is a Hong Kong-based investment management and holding company, having its principal business interests in telecommunications, consumer food products, infrastructure and natural resources.

The proposal was conditional upon the completion of a due diligence exercise on the commercial, financial, legal, tax and other affairs of Cocoaland and its subsidiaries for a period of four weeks; and the negotiation and execution of a sale and purchase agreement for the proposal on terms and conditions satisfactory to all parties.

Cocoaland in May this year rejected a takeover bid by Navis Asia VII Management Co Ltd that valued the company at RM377.52 million or RM2.20 per share, a 6.8% premium to the previous close.

Cocoaland's net profit more than doubled to RM8.01 million for the first quarter ended March 31, 2015 (1QFY15) from RM3.41 million a year ago, mainly due to a higher profit margin sales mix, as well as higher gain on foreign exchange and lower impairment of receivables.

Revenue rose 14.3% to RM67.74 million from RM59.25 million in 1QFY14.

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This article first appeared in The Edge Financial Daily, on July 21, 2015.