Group MD fails to take over Rex Industry

New high for Dagang NeXchange Bhd

KUALA LUMPUR: Group managing director Darmendran a/l Kunaretnam’s plan to take over canned food and drink manufacturer Rex Industry Bhd has fallen through as his RM1.65-per-share offer attracted only 5,525 shares, or 0.01% of the issued share capital.

RHB Investment Bank Bhd, in its announcement to Bursa Malaysia, said the combined shareholding of Darmendran (the ultimate offeror), his special vehicle Daiman Taipan Sdn Bhd and persons acting in concert (PACs) reached 33.73% as at 5pm on Tuesday, the offer’s closing date.

The condition to be met for the conditional takeover was that the offeror Daiman Taipan must end up with valid acceptances resulting in it and its PACs holding more than 50% of Rex’s issued share capital, failing which the offer would lapse and all acceptances returned to the shareholders who accepted the offer.

Rex shares closed at RM1.75 on Tuesday, 4 sen lower than the previous day. Its price had been RM1.67 when the board was served with the takeover notice on Feb 7 but the price shot up to reach RM1.84 on Friday (Feb 17) the following week. 

Rex’s non-interested directors - chairman Tan Sri Mohd Ibrahim Mohd Zain, Lee Soo Keat, Mohd Faisal Izan Abdul Latiff, and Tai Keat Chai - had agreed with independent adviser MainStreet that shareholders should reject Darmendran’s offer.

MainStreet said that although the offer could be deemed “reasonable”, the “not fair” view outweighed the “reasonable” view as the offer price marked a substantial discount of 35.29% to the estimated realisable net asset value of a Rex share of RM2.55.

The conditional mandatory takeover offer was triggered earlier last month after Darmendran and Daiman Taipan acquired a total of 4.54 million additional shares in the company from the open market for RM7.36mil.

The acquisition increased Darmendran’s control in Rex Industry to 33.7%, which required him to extend an offer for the rest of the company’s shares. 

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