PETALING JAYA – A group led by prominent businessman Tan Sri Wan Azmi Wan Hamzah (pic) has launched a cash offer of 63 sen per share to mop up all the shares they do not already own in Tecnic Group Bhd.
In a filing with Bursa Malaysia, the plastic product manufacturer said it had received notice of an unconditional mandatory general offer (MGO) from the joint offerers, namely Rohas-Euco Holdings Sdn Bhd (RE Holdings); Wan Azmi and his wife Puan Sri Nik Anida Nik Manshor; George Sia and Chan Liew Hoon yesterday.
The MGO was pursuant to a reverse takeover (RTO) deal that had started in September 2015. In the exercise, RE Holdings had offered to sell its entire equity interest in Rohas-Euco Industries Bhd (REI) for RM200mil to Tecnic to be satisfied via the issuance of 317.5 million new 10 sen shares in Tecnic at 63 sen apiece.
The RTO deal effectively gives RE Holdings an 88.7% stake in Tecnic.
RE Holdings and Tecnic signed the sale and purchase of shares agreement (SSA) for the acquisition in January last year. Following thereto, RE Holdings executed a letter of nomination in May 2016 to nominate its shareholders, namely Wan Azmi, Nik Anida, Sia and Chan to receive and accept the consideration shares in place of RE Holdings.
“The joint offerers currently do not hold any Tecnic shares. Upon completion of the acquisition (pursuant to the SSA), the collective shareholdings of the joint offerers will increase to 88.71%,” the takeover offer notice from Hong Leong Investment Bank Bhd on behalf of the joint offerers read.
Although the new Tecnic shares pursuant to the acquisition had yet to be issued as of the date of the notice yesterday, the SSA had become unconditional. The joint offerors were, therefore, obliged to extend the MGO to acquire all the remaining Tecnic shares not already owned by them for a cash consideration of 63 sen for each offer share.
Tecnic shares rose eight sen to RM1.26 before being suspended from 11am yesterday, pending the above announcement.
Trading in the shares of Tecnic will resume today.
According to the notice, the offer price was determined based on the higher of the issue price for each consideration share to be issued to Wan Azmi, Nik Anida, Sia and Chan pursuant to the acquisition, or the highest price paid by the joint offerors for Tecnic shares during the six-month period prior to the date of the SSA in January last year.
In addition, Tecnic’s shareholders had on Thursday approved a cash distribution. For illustrative purposes, the amount is assumed to be 50 sen per Tecnic share based on the audited financial statements of Tecnic for the six months to June 30, 2016.
It stated that premised on that, should shareholders of Tecnic continue to hold their Tecnic shares and accept the offer, the expected value to be received for each Tecnic share would approximately be RM1.13.
The offer notice, however, stressed the actual amount to be distributed pursuant to the distribution could vary, and the entitlement date for the distribution had not been determined.
“The offer is not conditional upon any minumum level of acceptances of the offer shares, as the joint offerors would collectively hold more than 50% of the voting shares of Tecnic upon completion of the acquisition,” the notice said, adding that it was the intention of the joint offerors that all acceptance of the offer shares to accrue to RE Holdings.
The joint offerors have the intention to maintain the listing status of Tecnic on the Main Market.
The group would, therefore, undertake measures to address the shortfall in the public spread requirement, whereby a listed issuer must ensure at least 25% of its total listed shares were held by public shareholders.
These measures include a public issue of up to 42 million new Tecnic shares, representing up to 10.5% of the enlarged capital of the company, to be implemented by way of a private placement or public ballotting; and an offer for sale of up to 58 million Tecnic shares, representing up to 14.51% of the enlarged capital of the company, to be offered by Wan Azmi, Nik Anida, Sia and Chan by way of a private placement.
Tecnic’s subsidiaries are involved in plastic mould design and fabrication, plastic injection and blow moulding, and the provision of secondary and assembly services for the manufacturing of plastic products.
RE Holdings is an investment holding company, with Wan Azmi, Nik Anida, Sia and Chan as the controlling and/or substantial shareholders.