Iris launches conditional takeover of Versatile Creative (4995 VERSATL)

Iris launches conditional takeover of Versatile Creative
Business & Markets 2013
Written by Esther Lee of theedgemalaysia.com  
Tuesday, 24 September 2013 10:59

KUALA LUMPUR: Iris Corp Bhd, via its subsidiary Iris Healthcare Sdn Bhd (IHSB), together with three other parties have launched a conditional takeover of packaging product manufacturer VERSATILE CREATIVE BHD [] (VCB).

Iris and the three parties — Versatile Credit & Leasing Sdn Bhd (VCLSB), Datuk Tan Say Jim (pic) and Datuk Lee Kwee Hiang — have proposed to acquire VCB’s remaining shares for a cash consideration of 50 sen per share.

The joint offerors currently own 24.89% of VCB, with VCLSB holding a 20.64% stake. The offer will become unconditional if the offerors receive acceptances of at least 74.89%.

Iris said in a statement to Bursa Malaysia yesterday that the group believed VCB was a strategic fit for its proposed business plan to set up a food distribution division that will be involved in marketing and distributing the produce from its farms.

The total consideration for the proposed offer, assuming 100% acceptances by VCB shareholders, will be about RM41.55 million. The cash consideration will be funded entirely via bank borrowings. The proposed offer has to receive the approval of Iris shareholders and its lenders before the offer can be satisfied.

The offer price of 50 sen per share is at 0.9 times price-to-book value and 1.15 times the consolidated audited net asset per share based on FY12 ended Dec 31. It is also at a price-earnings ratio of 25.91 times based on the consolidated basic earnings per share for FY12 ended Dec 31.

The 50 sen offer price represents an 8.7% premium to VCB’s closing price of 46 sen per share on Sept 20. It is also a 13.83% premium to the five-day volume weighted average market price (VWAP), 19.44% premium to the one-month VWAP, 20.78% premium to the three-month VWAP, 39.36% premium to the six-month VWAP and 43.93% premium to the 12-month VWAP.

Iris said the joint offerors did not intend to keep VCB as a listed company.

For the second quarter ended June 30, VCB recorded RM15.95 million in revenue, an increase of 6.29% from RM15.01 million in the previous corresponding period. Nevertheless, net profit for the quarter declined 23.48% to RM189,000, from RM247,000 previously.


This article first appeared in The Edge Financial Daily, on September 24, 2013.

4995 VERSATL trading last at 0.46