RCI gets buyout offer

Mega First offers RM2.10 a share to take Rock Chemical Industries private

PETALING JAYA: Mega First Corp Bhd has served a notice to Rock Chemical Industries (M) Bhd (RCI) a conditional take-over offer to acquire the remaining shares it does not yet own in RCI for RM2.10 per share.

The offer is 35 sen or 20% higher than RCI’S share price on March 15.

Currently Mega First owns a 60.43% stake in rci while permodalan Nasional Bhd holds the other major stake of 12.96%.

RCI executive director Chu Beng Han and non-executive director Datuk Richard Ong Guan Seng both hold the remaining 0.24%.

From the 60.43% stake, the Mega First group holds 38.39%, while its subsidiaries Authentic Excellence

(The offer is attractive) given (that) the counter that has not moved much, and based on the movement of RCI today, the market is accepting the move well. — ATTRIBUTE

and Geo-mobile Asia each owns 22.03% and 0.01% respectively.

RCI’S current price-to-book value per share is 74 sen.

Both Mega First and RCI shares were suspended prior to the announcement last Friday. Trading resumed yesterday at 2.30pm.

The offer is still pending approval from the Securities Commission.

The joint offerors, Authentic Excellence and Geo-mobile Asia, said that it was not their intention to maintain RCI’S listing status.

Mega First is mainly involved in the business of power generation, resources and property development and investment, and operates in both Malaysia and China.

RCI is principally engaged in extraction, manufacture, sales and distribution of limestone.

It also trades in building materials and chemical products and provides investment holding and provision of management consultancy services.

In a statement, Mega First said the offer was made to obtain full control of RCI, which would give the joint offerors greater flexibility to plan and decide on the strategic and future business directions of RCI.

Given the illiquidity of RCI shares, the offer would provide the holders with an opportunity to realise their investments in RCI for a cash consideration of RM2.10 per share.

Both counters are not covered by any research houses, but an analyst familiar with the matter said the offer, at over 20% premium, provided an attractive exit point for shareholders.

“This is given the background of the counter that has not moved much, and based on the movement of RCI today, the market is accepting the move well,” said the analyst.

RCI was notably one of the top gainers yesterday, recording an increase of 31 sen to close at RM2.06.