PETALING JAYA: Jardine Cycle & Carriage Ltd has served the board of Cycle & Carriage Bintang Bhd (CCB) notice to undertake an unconditional voluntary takeover offer to acquire all remaining shares in the group for RM2.40 a share.
As of March 12, Jardine holds 59.54 million shares in the group representing an estimated 59.1% equity interest.
It stated that the offer price of RM2.40 per share represents a 42.9% or 72 sen premium over CCBâs closing price of RM1.68 on March 16.
The majority shareholder stated that the offer price is final and that it will not revise the price. The offer is not conditional upon the receipt of any minimum level of valid acceptances as Jardine already holds more than 50% of the voting shares in CCB.
Jardine elaborated that due the ongoing headwinds faced by CCB, it will require significant capital expenditure to support operations and longer-term capital investments.
Furthermore, it pointed out the current offer price is a 9.09% increase from the RM2.20 offer it had proposed on Nov 11, 2019 in a bid to privatise CCV via a selective capital reduction and repayment exercise.
The majority shareholder argued the group needs to continue to invest to stay competitive in this challenging market and maintain its network share, which will require large capex with a long payback period that will impact its profitability.
Given that CCB will need to consider equity fundraising given its substantial level of debt, it reasoned that shareholders who may not wish to participate in such exercise can realise their holdings in cash with the offer.
Furthermore, Jardine pointed out that the Covid-19 pandemic has led to a decline of 2% and 12% in the groupâs unit sales and after sales volume respectively in 2020. For the financial year ended Dec 31, 2020 CCB has reported an audited net loss after taxation of RM13 million.
Following the exercise, the offeror stated that it does not intend to maintain the listing status of the counter.
