Through his investment vehicle Towerpack Sdn Bhd, Yeoh has undertaken a takeover of Aluminium Company of Malaysia Bhd (Alcom) after agreeing to purchase a 59.16 per cent stake in the aluminium rolled products manufacturer.
In a filing with Bursa Malaysia, Alcom disclosed that Yeoh, who is the controlling shareholder of Towerpack, had proposed to buy 79.23 million Alcom shares for RM47.72 million (Bt411 million) or 61 sen a share in an all-cash deal.
Yeoh already owns majority stakes in three separate listed entities. He holds a 32.9 per cent stake in aluminium packaging manufacturer Kian Joo Can Factory Bhd and 54.83 per cent in Box-Pak (M) Bhd via his interests in the former.
He is also a substantial shareholder of Can-One Bhd with a 27 per cemt stake.
Yeoh is the group managing director of Kian Joo and Box-Pak and is a Can-One board member.
“The proposed share acquisition represents an opportunity for the offerer to venture into the business of manufacturing and trading aluminium sheets, foil products and pre-coated finstocks in a meaningful way and allows the offeror to exercise management and operational control over the business of Alcom with a view of improving its future performance,” Alcom said in its filing with the exchange.
The entry into Alcom is set to open new avenues for diversification for Yeoh. The company said it was a major supplier of finstock for many of the world’s top air-conditioner manufacturers.
Alcom also produces a wide range of products to be used in a variety of applications such as building facades, signboards, bus bodies, utensils and lightning fixtures, among others.
The offer of 61 sen per share values Alcom at a market capitalisation of RM81.94 million, representing a large discount to the company’s net asset per share of RM1.24 as at March 31.
The company also has a cash pile of RM50.71 million and has zero borrowings, making it an attractive acquisition target.
The takeover attempt is the latest move in what has been an eventful year for Yeoh. Back in May, he had reached an agreement with Kumpulan Perangsang Selangor Bhd to sell a 60 per cent equity stake in the King Koil mattress brand licensing business via Kaiserkorp Corp Sdn Bhd for RM115.9 million.
The share sale and purchase agreement was executed between Towerpack and Novelis Inc, which is the controlling shareholder in Alcom.
It is worth noting that the purchase price of 61 sen represents a 17 per cent discount to Alcom’s closing price in the open market yesterday.
The last time the stock was trading at 61 sen in the open market was on August 18, 2015, or exactly a year ago.
On Thursday, Alcom’s stock closed at 74 sen on light trading volume.
Alcom said that after the completion of the proposed acquisition, Towerpack’s holdings of the voting shares of Alcom would increase from nil to 59.16 per cent .
Under Section 218(2) of the Capital Markets and Services Act, 2007 and Section 9(1) of Part III of the Malaysian Code on Take-Overs and Mergers, 2010, Towerpack will be required to extend a mandatory general offer to acquire the remaining voting shares of Alcom not already owned by Towerpack and persons acting in concert with it at 61 sen per Alcom share.
Yeoh owns 99 per cent of Towerpack, while his sons – Marc Francis Yeoh Min Chang and Keith Christopher Yeoh Min Kit – own the remaining 0.5 per cent stake each in the investment vehicle.
In its latest results for the financial year ended March 31, (FY16), Alcom reported an improved net profit of RM2.57 million on the back of RM287.41mil in revenue.
In comparison, for FY15, the company reported a net loss of RM1.64mil on a revenue of RM279.71 million.