Red Sena looking at local firms for qualifying acquisition

PETALING JAYA: Red Sena Bhd, the first food and beverage (F&B) special purpose acquisition company (SPAC) on Bursa Malaysia, has shifted its focus to targeting local F&B firms for its qualifying acquisition (QA) given the unattractive valuations in the regional market.
“In the case of Indonesia and Vietnam, their valuation expectations are even higher than in Malaysia. For Thailand and Vietnam, there are also many investors or potential buyers looking up for investments over there, that’s the reason why the valuation is high there,” its executive director and CEO Joseph Tan Eng Guan told reporters after the group’s AGM here today.
In addition, he said, it is more familiar with the local market, thus shifting its focus purely to the domestic market.
Red Sena, which has less than nine months till Dec 10 to complete its QA acquisition, has evaluated at least 50 companies so far but nothing concrete has materialised.
Tan, however, alluded that the group has narrowed down to a “handful” of companies for potential acquisition. It was reported that biscuit and confectionery products producer, Munchy Group could be the QA target.
He noted that the company has until the third quarter of this year to sign a sale and purchase agreement (SPA) albeit a last practicable window to establish an agreement being at the end of March.
“We are aware the deadline is drawing close, in the event that there should be no QA, we will have to liquidate the company and return the money to shareholders,” he said.
A few shareholders present at the AGM expressed their concern over the company being discreet with their engagements, citing the non-disclosure arrangements.
“If there is no QA, it is best for the company to return the money to shareholders,” a shareholder said.
Red Sena raised RM400 million through the issuance of 800 million shares through its initial public offering in December 2015, of which RM368 million has been put into a cash trust account as required.
For the financial year ended Sept 30, 2017, its cash trust account grew from RM374.06 million or 46.8 sen per share in 2016 to RM385.94 million or 48.2 sen per share.