International packaging manufacturer Scientex Berhad has obtained shareholders’ approval for the proposed acquisition of a 42.4% controlling stake in Daibochi Berhad for $54.37m.
Image: Shareholders approved the acquisition of Daibochi, at the Extraordinary General Meeting (EGM). Photo: Courtesy of Scientex.
Daibochi is a provider of flexible packaging in the South East Asian region, with manufacturing facilities in Malaysia and Myanmar providing high-barrier laminated flexible packaging.
The proposed acquisition targets the Scientex’s development of sustainable packaging solutions and market expansion in Myanmar
The purchase of 139.1million Daibochi shares is expected to be fulfilled by the distribution of 25.1million Scientex shares, with a share exchange ratio of one new ordinary Scientex share for every 5.535 Daibochi shares held.
Scientex said that at the EGM, shareholders also approved the proposed mandatory take-over offer (MGO) to acquire all remaining shares and warrants in Daibochi not already owned by Scientex.
On 10 December 2018, the conditional share sale agreement was signed between Scientex and Daibochi. Following shareholders’ approvals at the EGM, it is now becoming unconditional.
The company explained that the MGO entails an offer price of $0.39 for every Daibochi share and the shareholders of Daibochi are provided with the option to elect for share swap on the basis of 1 new ordinary Scientex share for every 5.535 Daibochi shares held, or to receive $0.39 in cash for every Daibochi share held.
In accordance with the Rule 6.03 of the Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the Securities Commission Malaysia, the offer price and exchange ratio are adjusted.
The purchase of Daibochi’s 42.4% stake is expected to be completed by 19 February 2019, and would contribute positively towards Scientex’s earnings for the financial year ending 31 July 2019 onwards.
Scientex managing director Lim Peng Jin said: “We see two key areas where our combined expertise can place both Scientex and Daibochi on an accelerated growth trajectory synergistically. Firstly, the knowledge-sharing between our in-house Research and Development teams would enable us to develop a wider range of sustainable flexible plastic packaging, in close collaboration with brand owners and multinational corporations.
This is imperative to being in the forefront of product innovation, in line with increasingly urgent demand for more environmentally-friendly products. Secondly, we are poised to benefit from increasing opportunities in the food and beverage (F&B) and fast moving consumer goods (FMCG) markets in Myanmar as it transitions from a closed to open economy. We hope to scale up its operations to tap into the fast-growing market.”