Lim brothers launch takeover offer to take Huat Lai private

Huat Lai is one of the country's biggest egg producers.

KUALA LUMPUR: Huat Lai Resources Bhd chairman/managing director Lim Yeow Her and his brothers have launched a voluntary takeover offer of the poultry firm’s shares for RM5 each to take it private.

The Malacca-based company told Bursa Malaysia that Esprit Unity Sdn Bhd and its shareholders (Lim and his brothers, executive directors Lim Yeow Kian and Datuk Lim Yeow Siong) offered to buy all the remaining shares that they did not own, representing 25.35% of Huat Lai’s paid-up share capital.

The Lim brothers would have to fork out RM98.9mil for the 19.78 million ordinary shares they do not already own.

Huat Lai shares gained 14 sen to close at RM4.80 on Monday, with 12,500 shares traded.

The cash offer is conditional on the joint offerors having received by the closing of the offer valid acceptances resulting in they holding 90% or more of the voting shares

If successful, the Lim brothers do not intend to maintain Huat Lai’s listing status on Bursa Malaysia’s main market.

Huat Lai said its board had resolved to appoint Mercury Securities Sdn Bhd as the independent adviser to advise the non-interested directors and holders of the offer shares.

Huat Lai, which also makes fertilisers, animal feeds and paper egg trays in addition to doing poultry farming, reported a 37% drop in profit attributable to shareholders to RM30.73mil for the first six months ended June 30, 2016, on 9% higher revenue of RM787.0mil.

Last year the company achieved its best financial and operational results, with after-tax profit of RM40.12mil and revenue of RM1.4bil, despite the “tougher-than-expected” operating environment.

Huat Lai is the majority (69.8% interest) shareholder of listed table egg producer TPC Plus Bhd, where Yeow Her had been chairman and MD as well until his resignation from both posts last November.

However, TPC Plus has been a Practice Note 17 company since February 2014 following its auditors’ expressing an emphasis of matter on the group’s ability to continue as a going concern.