Big fish eats small fish

On 28th April, 2016, both the Boards of Directors of Karambunai Corp Bhd and Petaling Tin Bhd announced to Bursa Malaysia that they have received a notice of unconditional voluntary take-over offer from RHB Investment Bank Bhd on behalf of Chen Lip Keong (CLK).

For Kbunai, CLK offered to acquire the remaining 31.54% of Kbunai share at 5 sens a share (NTA 14 sens) and the remaining 68.47% of  Kbunai-Warrant C at 2 sen each. Click 'Kbunai's Offer Document' for details.

For Petaling Tin, CLK offer to acquire the remaining 38.53% of Petaling Tin at 24 sens a share (NTA Rm1.03). Click 'Petaling Tin's Offer Document" for details.

CLK's holding in Kbunai is 68.46% (direct) + 5.87%(indirect through FACB) = 74.33% and his holding in Petaling Tin is 65.07% (excluding treasury share).

CLK stated clearly in his offer document that he has no intention to maintain the listing status of both the companies irrespective of whether he can get 90% or more of the company's share. His game is simple, he just has to ensure that the public shareholding spread of 25% is not met, then both the companies will be automatically suspended by Bursa Malaysia. This may not lead to the de-listing of the companies but to the minority shareholders the impact is almost the same - you ended up holding shares that you cannot sell.

If there is another bigger fish wanted to buy over Kbunai and Petaling Tin from CLK, I believe he will not sell Kbunai and Petaling Tin for anything less than their respective NTA of 14 sens and Rm 1.03.

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