DATUK Eddie Ong Choo Meng, who recently took control of Rubberex Corp (M) Bhd, is understood to have emerged as the front runner to take over GPA Holdings Bhd, sources familiar with the matter tell The Edge.
It is said that Ong has pipped data centre operator Regal Orion Sdn Bhd and is in the final stage of talks to wrest control of GPA, but details of the deal were unknown at press time, with both parties keeping the terms close to their chests.
Ong could not be contacted to confirm or deny the speculation, but market talk has it that he could emerge in GPA in as early as a week or two, if all goes well.
“His offer is a little better than that of Regal Orion. There were two or three parties, but he looks like the best bet to take over GPA,” one merchant banker familiar with the deal says, but declines to comment further.
Last month, The Edge reported that Regal Orion was in talks for a reverse takeover, which was subsequently confirmed by GPA.
In response to the Bursa Malaysia query, GPA said on Aug 10: “Upon enquiry with the board of directors and major shareholder of the company, Tan Sri (Robert) Tan Hua Choon, the non-independent and non-executive chairman of the board and major shareholder of the company, has confirmed that he has been approached by several interested parties, including the company named in the aforesaid newspaper article (Regal Orion), for possible asset injection into GPA. However, there has not been any concrete development thereof which would warrant an announcement to be made at this point of time.”
On Aug 26, Tan ceased to be a substantial shareholder after disposing of 277.65 million shares or 28.32% equity interest in GPA. In an amended announcement to Bursa on Aug 26, the company said Tan had also disposed of 124.74 million warrants.
Checks on Bloomberg indicate that 277.65 million shares of GPA had changed hands in morning trade on Aug 26 at 16 sen, for a total value of RM44.42 million. There has yet to be any announcement of who the buyer was.
Last Friday, GPA shares closed at 21 sen apiece, giving the company a market capitalisation of RM205.9 million. The stock, which was listed in 2000, hit an all-time high of 33 sen on Aug 27.
As at end-June, GPA had a net asset per share of 11 sen. According to the company’s latest annual report, in FY2019, it had two parcels of land, one measuring 6.1 acres in Klang (on which sits an office and a warehouse) and the other measuring 3.03 acres also in Klang (on which sits a warehouse that has been rented out). Collectively, the two parcels had a net book value of RM43.14 million in March 2016.
For the first three months of FY2021 ending March, GPA chalked up a net profit of just RM69,000 from RM7.61 million in revenue. For the corresponding period a year ago, it recorded a net profit of RM180,000 from RM5.91 million in sales. As at end-June, GPA had cash and bank balances of RM62.88 million, but it had little in terms of liabilities.
It is interesting to note that Tan and his long-time lieutenant Datuk Anderson Thor Poh Seng stepped down from their respective positions on GPA’s board, as non-independent and non-executive chairman and non-independent non-executive director respectively on Aug 26. Tan’s reason for stepping down was that he had “ceased to be major shareholder” while Thor’s was a “change in major shareholder”.
In the meantime, Koo Kien Yoon was appointed an executive director of GPA. Interestingly, he has directorships at Lambo Group Bhd and Vsolar Group Bhd.
GPA’s core business lies in the manufacturing of batteries while Ong, who is in his early forties, is executive director of chemical firm Hextar Global Bhd and non-executive director of industrial products supplier SCH Group Bhd.
At Hextar Global, Ong and his father Datuk Ong Soon Ho have 67.585% equity interest, held via Hextar Holdings Sdn Bhd. Hextar Global’s shares closed at 69 sen last Friday, giving the company a market capitalisation of more than RM566.27 million.
Hextar Holdings holds a 30.91% stake in SCH Group. The latter’s share price closed at 12.5 sen last Friday, giving the company a market capitalisation of RM69.4 million.
Ong has been in the news lately. In July, he undertook a mandatory general offer (MGO) for Rubberex at RM1.80 per share, having made an acquisition of another 20.63% equity interest for RM103.05 million, raising his stake to 50.18% or above the 33% threshold that triggers an MGO.
However, the sharp gain in Rubberex’s share price, which closed at RM5.66 last Friday to give the company a market capitalisation of more than RM1.57 billion, rendered Ong’s general offer unattractive.