PETALING JAYA: Abric Bhd has a received a non-binding indication of interest from an undisclosed party to acquire its core business.
The company told Bursa Malaysia yesterday that its board had deliberated on the matter and had agreed to offer exclusivity to the interested party for a due diligence exercise to be conducted for the purpose of determining the definitive terms of the offer.
The due diligence is expected to be completed within two months.
“The board wishes to inform that the interest is at the preliminary stage as the due diligence has yet to commence and may or may not lead to a definite offer from the interested party.
“Should there be any further development on this matter or upon the receipt of an offer with definitive terms, the board will assess and advise the shareholders on the offer,” it said.
It added that an announcement would be made to Bursa Malaysia in accordance with Bursa Securities listing requirements.
The company did not reveal any other information regarding the potential acquisition.
The announcement seems to justify the company’s year-high share price of 72.5 sen on July 17.
Established in 1983, Kuala Lumpur-based Abric is a global provider of security sealing solutions and has presence in 88 countries.
Company executive chairman Datuk Ong Eng Lock owns a 7.07% stake in Abric.
According to Abric’s annual report, Ong’s spouse is indirectly a major shareholder of the company via Abric Capital Sdn Bhd with a 28.90% stake.
The company’s net profit for its first quarter ended March 31, 2014 slipped to RM333,000 from RM610,000 in the previous corresponding period, mainly due to a decrease in revenue and higher raw materials and labour costs, which affected its margins from sales.
Its revenue was lower at RM19.09mil from RM20.07mil a year earlier.
On its outlook, the company told Bursa in its notes accompanying its first-quarter results that the Asia-Pacific and America regions were expected to contribute to sales growth.
It said the sluggish European economic condition, together with the shrinking purchasing power in Europe, continued to be a challenge to the group along with rising operating expenses especially raw materials and labour costs.
Did you find this article insightful?