MD and family offer to take LTKM private

In a filing with Bursa Malaysia yesterday, Tan(pic) and other joint offerers have made a conditional voluntary takeover offer to buy out minority shareholders at RM1.35 a share.

PETALING JAYA: Chicken egg producer LTKM Bhd said managing director Datuk Tan Kok (pic) and his family have offered to take the company private.

In a filing with Bursa Malaysia yesterday, Tan and other joint offerers have made a conditional voluntary takeover offer to buy out minority shareholders at RM1.35 a share.

The offer values the company at RM175.5mil. Tan and joint offerers control 68.3% of the company.

“The joint offerers do not intend to maintain the listing status of LTKM on the Main Market of Bursa Malaysia,” it said.

Tan is the single largest shareholder of the company through his vehicle Ladang Ternakan Kelang Sdn Bhd.

The privatisation offer came as a surprise following the suspension of the counter last Friday. A few days prior to the suspension, shares in LTKM soared 16% to RM1.14. The counter will resume trading today.

The offer price for the remaining shares represents a premium of 27.79% to the adjusted five-day volume-weighted average market price (VWAP) of the shares until July 18, the last trading day.

The offer price also represents a 30.74% and 17.48% premium to the one- and three-month VWAP of LTKM.

The stock was last traded at a single price earnings ratio (PE) of seven times, which was way below its peer valuation, including CAB Cakaran Corp Bhd, at 15 times and Lay Hong Bhd at 40 times.

LTKM is one of the leading local chicken egg producers listed on Bursa Malaysia since 2000.

The company produces more than one million eggs per day from its automated layer farm in Melaka spanning over 450 acres.

In 2016, the company ventured into property development to unlock the value of its 8.5ha in Kuala Langat, Selangor, as well as expanding its revenue and income stream.

In the financial year ended March 31, 2019, LTKM saw the highest net profit in four years, which saw a jump of more than 10 times to RM20.96mil from RM2.39mil a year earlier due to improvement in egg prices.

The profitability of poultry companies has been a little patchy, influenced by feed costs and market prices of both broilers and eggs.

Revenue during the period jumped 12.17% to RM196.34mil from RM175.03mil previously.

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