This article first appeared in The Edge Financial Daily on July 4, 2019

KUALA LUMPUR: The privatisation of Yee Lee Corp Bhd did not materialise as the joint offerors, one of whom is the founder, were unable to garner enough acceptance for the voluntary takeover offer at RM2.29 per share (excluding four sen dividend).

In a filing with Bursa Malaysia after the offer closed at 5pm yesterday, Yee Lee announced the joint offerors have only managed to hold an 89.85% shareholding in the company, a whisker short of the 90% threshold to suspend the trading of the securities.

The joint offerors —  founder Datuk Lim A Heng @ Lim Kok Cheong and Singapore-based Dymon Asia Private Equity (SE Asia) Fund II Ptd Ltd — received a valid acceptance of 54.05 million shares, equivalent to a 28.21% stake. Additionally, the offerors have accepted 1.489 million shares or 0.78%, pending verification, according to the filing.

The Lim family controlled 116.6 million or 60.86% of Yee Lee shares when the takeover offer was made in late-April.

Under the circumstances, Yee Lee remains listed for now, until Lim and Dymon Asia decide on the next step.

An option the joint offerors may consider is to continue mopping up more shares on the open market to raise their shareholding to 90% and seek the stock exchange’s approval to suspend the trading of the shares.

Once trading is suspended, the chances of minority shareholders taking up the offer will be higher as most investors are not keen to hold non-traded shares.

In fact, the joint offerors are short of only 287,406 Yee Lee shares to suspend the stock.

Still, those shares in hand will only enable the duo to suspend the trading of the shares but not undertake a compulsory acquisition to buy the remaining shares they do not own.

“They (the offerors) may consider an exit offer later at [a] different price, which could be lower, higher or even the same price,” said a corporate finance adviser, noting a fresh offer will not be backdated to the earlier offer.