PETALING JAYA: 7-Eleven Malaysia Holdings Bhd’s wholly owned subsidiary Convenience Shopping (Sabah) Sdn Bhd and persons acting in concert (PACs) propose a conditional mandatory general offer (MGO) for Caring Pharmacy Group Bhd for RM2.60 per share.
This values Caring Pharmacy at RM566 million.
The MGO will be triggered after Convenience Shopping and PACs complete the acquisition of a 25.35% stake in Caring Pharmacy from Motivasi Optima Sdn Bhd for RM143.5 million or RM2.60 per share, which will bring their shareholding in Caring Pharmacy to 38.57% from 13.22%.
Motivasi Optima’s stake in Caring Pharmacy will then be reduced to 25%.
The PACs are 7-Eleven, Tan Sri Vincent Tan Chee Yioun, Jitumaju Sdn Bhd and U Telemedia Sdn Bhd.
The offer price represents a 10 sen or 4% premium against Caring Pharmacy’s yesterday closing price of RM2.50.
7-Eleven intends to maintain Caring Pharmacy’s listing status on the Main Market of Bursa Securities subsequent to the MGO.
The proposed acquisition will be funded by a combination of bank borrowings and internal funds.
7-Eleven said it was undertaking the proposed acquisition for several reasons: an immediate expansion of network and reach of stores and product range through the combined operations; immediate access to a fully operational and profitable pharmacy business; opportunities to cross-sell products from both group of companies; expansion into e-commerce and expected economies of scale and synergies from the operational optimisations.
As at Aug 31, 2019, Caring Group has a total of 129 community pharmacies, and the proposals will allow 7-Eleven to have immediate access to a new network of retail stores and to widen its product range through the combined operations.
“The proposals would allow the 7-Eleven group to expand its sales channel by leveraging on Caring’s current e-commerce network and infrastructure.
“Given the current success of Caring’s e-commerce platform and mobile application, the 7-Eleven Group would not only be able to expand its reach to customers by listing its products on Caring’s online platform, but at the same time bring more convenience and flexibility to its customers, value-added services through the mobile application, and ultimately improving customer experience as well,” 7-Eleven noted.
Caring’s online sales platform, also known as CARiNG e-Store, was launched in 2018 to allow customers to purchase products online and collect them at selected outlets or via delivery.
Since its launch, Caring’s online service has seen its monthly transactions more than double from June 2018 to May 2019, while its mobile application has close to 390,000 members.
The proposals are expected to be completed in the first half of next year.
