Lay Hong in talks with foreign firms on strategic stake

PETALING JAYA: Lay Hong Bhd said it is unaware of reasons that may have led to the recent rise in its share price, save for the possible entry of new substantial shareholders in the company.

In a reply to Bursa’s query on Monday, the poultry firm said it is in the midst of discussions and negotiations with two foreign groups on taking a strategic investment stake in Lay Hong.

Lay Hong added that there are also possible joint ventures to invest in integrated layer farming and integrated broiler processing in local and overseas operations.

“Both negotiations are progressing and the company expects to conclude and execute definitive agreements in less than two months either with one party or both,” it said, adding that it will make the necessary announcements in compliance with its obligations under the Main Market listing requirements of Bursa Securities once any of these have been finalised.

This was the second unusual market activity (UMA) query issued against Lay Hong in the past one month.

The counter retreated 12 sen or 1.85% yesterday to close at RM6.38 on some 197,900 shares done. It has, however, nearly doubled in the past three months and hit a record high of RM6.50.

Worth noting is that QL Resources Bhd, which was once the second largest shareholder of Lay Hong, disposed of its entire 38.63% stake in Lay Hong for RM3.05 per share last September, on the grounds that it was unable to have a say in Lay Hong’s business operations.

Earlier, Lay Hong announced that it was acquiring the Thai unit of Takaso Resources Bhd, Takaso SC (Thailand) Ltd, as part of its business expansion in chicken and food processing for export to regional countries, for RM9 million in cash.

Lay Hong’s net profit surged 66% to RM2.58 million for the first quarter ended June 30, 2015 compared with RM1.55 million in the previous corresponding period.