Update QL Resources makes voluntary take-over bid for Lay Hong at RM3.50 per share

by **Cals** Thu 25 Sep 2014, 01:24

Update QL Resources makes voluntary take-over bid for Lay Hong at RM3.50 per share

Business & Markets 2014

Written by Tang Wei Lynn of theedgemalaysia.com

Wednesday, 24 September 2014 19:28

KUALA LUMPUR (Sept 24): QL Resources Bhd, which holds a 26.81% stake in Lay Hong Bhd, has proposed to make a conditional voluntary take-over offer for the rest of shares it does not own in Lay Hong for about RM128 million or RM3.50 per share.

The offer price of RM3.50 per share represents a 1.8% premium over Lay Hong’s last done share price of RM3.44 before the stock was suspended at 2.30pm today. It will resume trading at 9am tomorrow.

The counter rose 78 sen or 29.32% to hit a five-year high of RM3.44 before the trading halt today.

The offer price also represents a 38.89% premium over a five-day volume weighted average price (VWAP) of Lay Hong up to and including Sept 23 of RM2.52, and a 91.26% premium over a 12-month VWAP of RM1.83.

Based on Lay Hong’s unaudited net asset of RM2.43 as at June 30, the offer price stood at a premium of 44%.

QL Resources cited the rationale behind the take-over to Lay Hong’s controlling shareholders having not re-elected its sole representative of Lay Hong, Chia Mak Hooi, on the board as its board member at its annual general meeting on Monday, “without QL Resources’ prior knowledge”.

“This decision has direct adverse consequences on QL Resources’ investment in Lay Hong as QL Resources will no longer be able to influence its corporate direction. Furthermore, without board representation, QL Resources is concerned about its ability to safeguard the interests of its shareholders, and realise business synergies between Lay Hong and QL Resources,” QL Resources said.

Chia Mak Hooi was first appointed non-independent non-executive director of Lay Hong on July 6, 2011.

Based on the latest audited consolidated financial statements of QL Resources Group as at March 31, its net gearing is expected to increase from 0.31 times to 0.41 times after the takeover.

The offer, which will remain open for acceptances for at least 21 days, will be conditional upon QL Resources having received acceptances which would result in it holding in aggregate more than 50% of the voting shares in Lay Hong.

QL Resources also said it does not intend to maintain the listing status of Lay Hong.