KUALA LUMPUR (June 8): Egg producer Lay Hong Bhd (LHB) has proposed to acquire the remaining 50% stake in Sri Tawau Farming Sdn Bhd (STF) it does not already own for RM28 million in a related party deal.
STF is involved in poultry farming and mini-market operations, LHB said in a bourse filing.
The group said it is acquiring the stake from Mackan Holding Sdn Bhd, and will settle the RM28 million via the issuance of 80 million new LHB shares at 35 sen per share.
LHB said the deal involves its major shareholder, Innofarm Sdn Bhd, which in 2012 made a declaration of trust to Mackan, “Innofarm is entrusted to hold 500,001 STF shares on behalf of Mackan. As such, Mackan is the beneficial owner of the (shares),” the group said.
LHB executive chairman Datuk Yap Hoong Chai, along with Datuk Yeap Weng Hong and Yeap Fock Hoong, are common shareholders of LHB, Innofarm and Mackan.
LHB said the 35 sen per share consideration represents a premium of 10.34% over the five-day volume weighted average price of LHB shares up to the latest practicable date of 31.72 sen.
LHB said the acquisition is undertaken to enable STF to become a wholly-owned subsidiary of the company.
The group said it will be able to fully consolidate the financial performance of STF, adding that it is expected to contribute positively to the future earnings of LHB.
LHB said pursuant to the proposed acquisition, Yap’s shareholding in LHB (direct and indirect) will increase by more than 2% within a period of six months, and thereby trigger a mandatory takeover obligation.
However, Yap and persons acting in concert do not intend to undertake the mandatory offer, and propose to seek an exemption from the Securities Commission Malaysia, it said.
LHB said the acquisition is expected to be completed by the third quarter of 2021.
LHB’s share price closed one sen or 3.17% higher at 32.5 sen today, giving the group a market capitalisation of RM211.24 million. The counter saw 506,500 shares change hands.
