Off-Market Trades: Kian Joo Can Factory Bhd, Daibochi Bhd, Shin Yang Shipping Corp Bhd

This article first appeared in Capital, The Edge Malaysia Weekly, on February 25, 2019 - March 03, 2019.
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AT Kian Joo Can Factory Bhd, 2.17 million shares or a 0.49% stake changed hands off market on Feb 14 for RM6.71 million or RM3.10 per share. The exchange triggered a mandatory general offer for the rest of Kian Joo’s shares at RM3.10 apiece, as the purchase increased Can-One Bhd’s shareholding to 33.39%.

The day before the direct transaction, Kian Joo closed at RM2.87. It rose 4.5% on Feb 14 to end at RM3. Can-One does not intend to maintain Kian Joo’s listing status.

The transaction follows a conditional Dec 13 agreement between Can-One and the seller. To recap, in early February, Can-One’s shareholders voted at an extraordinary general meeting to pursue the general offer for Kian Joo.

If successful, the takeover of the 66.61% that Can-One does not own could cost about RM917.2 million. Can-One said the proposed takeover was part of its expansion strategy to consolidate its manufacturing business as well as grow its sales and customer base.

Last Wednesday, Kian Joo closed at RM3.03 per share, giving it a market capitalisation of RM1.35 billion. Can-One ended the day at RM2.68 per share or RM516.89 million — 40.31% higher than its one-year low of RM1.91 on Dec 20.

Another takeover bid is underway at plastic packaging company Daibochi Bhd, following a direct transaction of 138.7 million shares, or a 42.41% stake, on Feb 14. Scientex Bhd paid RM1.59 per share, or RM220.5 million, for the stake. In November, it announced the acquisition under a share swap arrangement with a group of individual shareholders, whereby one new Scientex share would be issued for every 5.5 Daibochi shares held by them.

The deal triggered a mandatory general offer for the rest of Daibochi shares at RM1.59 apiece, or a two-sen discount to its closing price on Feb 14. Shareholders can also opt for new Scientex shares in lieu of cash.

Also a plastic packaging materials maker, Scientex intends to keep Daibochi listed. Its offer is conditional, however, on its gaining more than 50% of the outstanding shares.

The ultimate offerors are Scientex managing director Lim Peng Jin and his brother Lim Peng Cheong, who also sits on Scientex’s board. Together, they control just under 57% of Scientex.

Daibochi’s share price has fallen by about 32% over the past year. It ended last Wednesday at RM1.60, giving it a market capitalisation of RM523.76 million. Scientex closed at RM8.83, giving it a market capitalisation of RM4.54 billion.

Over at Shin Yang Shipping Corp Bhd, 34.53 million shares were sold across two direct transactions for 29 sen apiece or RM10 million overall on Feb 19. Another 4.5 million shares were transacted for 20 sen apiece on the same day.

The 34.53 million shares represent about 3% of Shin Yang Shipping’s outstanding shares. The transacted price reflects the market close on the same day.

Last Wednesday, the stock closed at 29 sen, 26% higher than a year ago, valuing the company at RM342.31 million.

At the time of writing, no new substantial shareholders had emerged in the shipping firm. The company had been embarking on a string of share buybacks, increasing its treasury shares by 989,000 this year alone to 26.59 million as at Feb 20.

The largest shareholder, with a 56.28% stake, is Shin Yang Holding Sdn Bhd, the family vehicle of the Ling family, followed by DBS Group Holdings Ltd at 4.12% and Ling Siu Cho, 3.07%.

 

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