KUALA LUMPUR (April 28): The major shareholder of Ho Wah Genting Bhd (HWGB) intends to raise its stake in the loss-making company at nearly half the current market price of its shares.

Yesterday, HWGB announced it had received a notice of conditional voluntary takeover offer from major shareholder Ho Wah Genting Holding Sdn Bhd (HWG Holding/offeror) to acquire the remaining shares it does not own in HWGB at 12.5 sen each compared with the current market price of 20 sen.

However, HWG Holding intends to keep HWGB listed on Bursa Malaysia’s Main Market, according to HWGB’s statement to Bursa.

Wire and cable manufacturer HWGB said in the statement that the offeror also intends to buy the remaining HWGB warrants at one sen each. HWGB did not provide reasons behind the offeror’s voluntary takeover offer. 

"In accordance with Paragraph 3.06 of Take-Overs, Mergers and Compulsory Acquisitions Rules, the board will appoint an independent adviser to advise the non-interested directors and shareholders of the company on the fairness and reasonableness of the offer. The notice will be served to the holders of the offer securities within seven days of its receipt and a copy is enclosed herewith. 

"This announcement is dated April 27, 2020,” said HWGB, which also offers travel-related services. 

M&A Securities Sdn Bhd had announced on behalf of the offeror the latter’s intention to undertake the voluntary takeover offer. 

In the voluntary takeover offer notice, M&A Securities said the offeror already owns 148.56 million shares representing an approximately 29.38% stake in HWGB. 

The owners of the offeror are Datuk Lim Ooi Hong, Lim Wee Kiat and Datuk Teo Tiew, according to M&A Securities. 

At 12.5 sen, the voluntary takeover offer values HWGB at RM63.21 million based on the company’s issued base of 505.71 million shares. 

As at 12.30pm today, HWGB’s share price fell three sen or 13.04% to 20 sen. The company’s latest reported net assets per share stood at seven sen.

In February this year, HWGB reported that its net loss narrowed to RM6.99 million in financial year ended Dec 31, 2019 from a net loss of RM32.99 million a year earlier.