Can-One, Kian Joo share prices up
Shareholders aye takeover bid at RM3.10 a share
PETALING JAYA: Can-One Bhd, which already owns 32.90% of Kian Joo Can Factory Bhd, has launched a conditional mandatory takeover of the latter at RM3.10 a share.
This follows the takeover being approved at its EGM yesterday.
Kian Joo’s shares rose 13 sen or 4.53% to close at its day-high of RM3, near its takeover price, while Can-One’s shares also rose in tandem to close 10 sen or 3.88% higher at its day-high of RM2.68.
Can-One has offered to take over the remaining shares in Kian Joo at an implied price-to-earnings (PE) ratio valuation of 15.31 times the financial year 2017 ended Dec 31.
Kian Joo said yesterday that a copy of the takeover notice would be posted to the minority shareholders within seven days.
The takeover move that was approved yesterday will increase Can-One’s stake to 33.39% from 32.90%, thus triggering a mandatory general offer for all the remaining shares in Kian Joo that it does not already own.
The EGM saw 99.07% of the shareholders approving the motion to launch the takeover offer.
UOB Kay Hian Securities (M) Sdn Bhd has been appointed to act as the independent adviser to the non-interested directors and the holders of the offer shares in respect of the fairness and reasonableness of the offer.
At a price of RM3.10 per share, the offer totals some RM6.71mil that will be satisfied in cash should Kian Joo decide to accept the offer.
Can-One could also see its gearing ratio going up from 0.63 times as at Dec 31, 2017 to 2.45 times should the move be approved on Kian Joo’s end.
Can-One said in its circular to shareholders that it may need some RM923.91mil in bank borrowings for the transaction.
It further said that if the acquisition was successful, it would allow it to pursue its expansion strategy and long-term objective of becoming a market leader in the can manufacturing industry, which also comes with synergistic benefits if both companies are consolidated into one.
Commenting on the valuation of the deal, the acquirer said the proposed acquisition fell within the range of Kian Joo’s traded PE multiples for the past one year and until the last trading day of Dec 11, 2018.