This article first appeared in The Edge Financial Daily on October 30, 2019

KUALA LUMPUR: Candy maker Khee San Bhd’s share price soared 21.3% to 28.5 sen amid a potential mandatory general offer  that could be on the horizon, as the effective period of its heads of agreement (HoA) with Wah Kong Corp Sdn Bhd approaches its closing date.

Khee San pared some gains to close at 28 sen yesterday, up  4.5 sen and some 9.85 million shares done.

To recap, on Sept 11, Khee San, which defaulted on a RM14.62 million loan repayment, entered into the HoA with Wah Kong to pave the way for negotiations, as Khee San intends to acquire several of the latter’s subsidiaries that are involved in the sale and distribution of pet food products as well as household and consumer products.

If negotiations are successful, the purchase will be satisfied via the issuance and allotment of new Khee San shares at an indicative issue price of 33 sen per share.

The HoA will be expiring tomorrow, following the mutual agreement of both parties for the extension of the effective period from Oct 10.