PETALING JAYA: Kian Joo Can Factory Bhd’s share price hit limit up this morning, rising as much as 29.56% or 60 sen to RM2.63 upon resumption of trading, after a mandatory general offer (MGO) was launched by fellow can manufacturer and substantial shareholder, Can-One Bhd.
At 12.30 pm, the stock was still trading at RM2.63 with 173,000 shares done.
The trading of Kian Joo’s shares were suspended on Wednesday and Thursday, before resuming at 9 am this morning, to pave way for the announcement on MGO, which entails an offer price of RM3.10 per share or RM912.15 million for shares not already owned by Can-One in Kian Joo.
Can-One’s which also had the trading of its shares suspended for the same duration, rose 37sen or 19.17 sen to RM2.30 at early trade. At 12.30 pm, the stock was trading at RM2.14 with 674,100 shares done.
This comes after Can-One’s proposed acquisition of a 0.49% stake in Kian Joo from shareholder Tan Kim Seng for RM6.71 million or RM3.10 per share, raising its shareholding in Kian Joo to 33.39% from 32.9%.
The offer price represents a whopping 51.28% premium to Kian Joo’s five-day volume weighted average price of RM2.0492.
Can-One said the corporate exercise is part of the group’s expansion strategy to consolidate the can manufacturing business under Kian Joo in a bid to grow its sales and customer base.
It will also create enhanced scale and synergies for the enlarged Can-One group through, among others, streamlined procurement from suppliers to negotiate for bulk discount and improved operational efficiencies, resulting from economies of scale and integration.
In a related development, the Securities Commission Malaysia (SC) has reprimanded Can-One director and major shareholder Yeoh Jin Hoe and parties acting in concert (PACs) – including Can-One International Sdn Bhd (CISB) – for failure to undertake a mandatory offer for the remaining shares in Kian Joo after their shareholdings triggered the 33% MGO threshold.
This is breach of Section 218(2) of the Capital Markets & Services Act, 2007 and Paragraph 9(1)(a) of the Take-Overs Code.
The SC imposed a penalty of RM455,000 to be settled within 14 days against Yeoh and PACs as well as a restriction on the aggregate number of voting rights that may be exercised by the PAC in Kian Joo to not more than 33%.
If the proposed corporate exercise for which consultation with the SC was held on Dec 21, 2017 is not carried out within six months from the date of the commission’s letter, the PACs are required to reduce their collective holdings in Kian Joo to 33% and below.