KUALA LUMPUR (June 4): Jardine Cycle & Carriage Ltd’s (Jardine CCL) takeover offer for Cycle & Carriage Bintang Bhd (CCB) has fallen through for the second time in two years.

In a statement today, Jardine CCL said it only managed to raise its shareholding by 21.57% to 88.04% or 88.69 million shares, from 66.47% on April 7. The offerer needed to obtain at least 90% of shares it did not own to trigger a compulsory share acquisition.

Jardine CCL’s unconditional voluntary takeover at RM2.40 per share was snubbed, even after the offer deadline was extended three times from April 28 to today (June 4). The offer valued CCB at RM241.79 million.

In the open market, shares of the largest Mercedes-Benz dealer in the country closed unchanged at RM2.40, after rising to RM2.47.

The RM2,40 offer price is 42.86% higher than CCB's closing price of RM1.68 when the announcement was made on March 17, and 0.84% higher than its net asset value of RM2.38 per share as at end-March.

Independent adviser Affin Hwang Investment Bank Bhd in its circular, recommended that shareholders accept the offer, which it described as ‘not fair’ but ‘reasonable’.

But the counter has hovered above the takeover offer most of the time since the offer was made, and even jumped to a high of RM3 on May 7.

After the offer, CCB saw the emergence of Open Road Asia Sdn Bhd (ORA) as a new substantial shareholder, with 5.5% stake.

According to its website, ORA is controlled by its founder and group adviser Datuk David Goh.

ORA is an “established collaboration partner with luxury automotive brands” such as AMG, Aston Martin, Bentley, Ferrari, Jaguar, Land Rover, Mercedes-Benz, Porsche, Rolls-Royce and Proton, it added.

Moving forward, Jardine CCL may need to comply with the public shareholding spread requirement of 75%, or it could seek a voluntary withdrawal of CCB’s listing.

Jardine CCL's first attempt to privatise CCB in November 2019 was via a proposed selective capital reduction (SCR) and repayment exercise at RM2.20 per share.

At the time, minority shareholders blocked the privatisation with more than 10% of disinterested shareholders including listed company Muar Ban Lee Group Bhd voting against the SCR.

Shares of the company had been on a downtrend from a high of RM3.48 in 2016 up until 2020, as the company was swinging from profit to loss since its financial year ended Dec 31, 2017 (FY17), amid an increasingly competitive operating environment.

CCB bottomed out in FY19 with its biggest annual loss of RM39.2 million, on revenue of RM1.14 billion. In 1QFY21, the group turned back into the black with a net profit of RM3.39 million on revenue of RM292.83 million, as it sold more vehicles.