KUALA LUMPUR: QL Resources Bhd’s 38.63% stake in poultry farmer Lay Hong Bhd has been sold to RHB Investment Bank Bhd, which has now placed out the shares in several tranches, according to sources. 

It is understood that at least one institutional fund has picked up one block of shares in Lay Hong from RHB, plus several individuals. 

Such news will help to ease the worry of the Yap family — which founded Lay Hong — that the large block of shares may have fallen to another rival in the poultry farming industry and that this may trigger another round of shareholders tussling to gain control of the company. The Yap family holds a 42.79% stake in Lay Hong. 

When contacted, QL Resources

managing director Chia Song Kun said, “We don’t know who the buyer of the shares is, because it is being done through RHB. We sold the shares to them, and they will place them out.”

Last week, QL Resources announced the disposal of the shares for RM60.59 million or RM3.05 a share, which was at a steep discount to the closing price of RM3.90 on the announcement day. Since QL Resources’ initial investment cost in Lay Hong was low, it made a gain of RM18.87 million on disposal.

The company said the rationale for the divestment was that it could not have a board representative in Lay Hong despite holding a substantial equity stake. 

RHB was also the adviser to QL Resources when the latter first proposed the voluntary general offer (VGO) to buy out Lay Hong in September last year, at RM3.50 a share. At that time, QL Resources’

stake in Lay Hong was only 26.81%, of which a 24% block was acquired from London Biscuits Bhd back in 2010.

Recall that QL Resources made a hostile attempt to wrest control of Lay Hong from the Yap family after its only representative on the poultry farmer’s board — Chia Mak Hooi — was not re-elected.

After the VGO was announced, QL Resources failed to obtain the 50% acceptances necessary to take control of Lay Hong. However, QL Resources had acquired whatever Lay Hong shares it could in the open market.

This article first appeared in digitaledge Daily, on September 15, 2015.