Can-One has won the legal tussle to acquire the 146.13 million Kian Joo Can Factory shares held by Kian Joo holdings Sdn Bhd at rm1.65 per share for rm241116975 after a Federal Court ruled in its favor. The court had allowed its appeal to proceed with the completion of the acquisition of the 32.9% stake for rm241.11 million.
Sources say there is a possibility of Can-One raising funds for the deal via a placement exercise of its own (Can-One) shares.
Also speculation is rife that the Sees may utilize part of rm241.1 million sale proceeds to launch a counter attack against Can-One.
The Sees may buy back KJCF shares from the open market, or even buy up the shares of Can-One. The are not likely to give up so easily, especially when some members of the family are keen on running the businesses.
On whether he or his family members will buy back shares in KJCF, See says if the stock price drops to a certain level which is attractive, then it may buy back from the market.
It is worth nothing that apart from the 32.9% stake that will be sold to Can-One, the See family members, including Teow and his brother still own 6.5% or more of KJCF in their personal capacity.
Can-One’s MD Yeoh owns almost a 30% stake in the company, while Koperasi Permodalan Felda Bhd owns 13.5% stake.
KJCF had proposed a bonus shares cum warrants rights issue exercise that would dilute Can-One’s interest should it not get the KFCF shares on time and be entitled to the bonus and rights issue.
Can-One had tried to seek an injunction from High Court against KFCF’s bonus and rights issue exercise but to no avail.
It is not known how Can-One will fund its acquisition of the 32.9% stake in KJCF. Given its small cash reserves, market observers say it is likely through share financing.
Can-One had rm11.85 million cash as at Sept 30, 2011 versus total borrowings of rm226 million. Its net current assets stood at a rm60 million.
Operationally, Can-One posted a net profit of rm20.01 million for the nine months ended Sept 30, 2011 on revenue of rm464 million.
However, Teow Chuan consistent purchase of KJCF shares in the open market may seem to suggest otherwise, and sparks may start flying again when the family receisves the rm241 million proceeds.
No comments:
Post a Comment