EQT in talks with Cocoaland for potential takeover at $85m

Cocoaland produces various confectionery ubiquitous in Malaysia. Image from the company website.

Swedish private equity group EQT Partners is in discussions to take over or acquire a controlling stake in Cocoaland Holdings Bhd, drawn to the company’s growth potential.

A local news weekly, Focus Malaysia, reported that EQT is mulling a takeover of Cocoaland at MYR1.80 per share, which translates to a price tag of MYR309 million ($85 million) for the entire company.

A source quoted said EQT could be interested in Cocoaland because of its growth potential as there is plenty of room for the company to grow.

“However, sources say (major shareholder) Leverage Success Sdn Bhd is likely to ask for a higher price than the one offered by EQT before it is willing to part with its shareholding. They say Cocoaland’s single largest shareholder is looking at around RM3 a share for its block,” the report added.

The confectionery manufacturer confirmed in a filing to Bursa Malaysia on Friday that its major shareholder Leverage Success is in preliminary discussions with EQT for various investment possibilities in Cocoaland.

The company said in the announcement that the investment possibilities under discussion include but are not limited to the acquisition of a majority or controlling interest, takeover or acquisition of the entire part of the group’s business operation.

“To date, no definitive and conclusive terms have been agreed upon between the parties. An appropriate announcement will be made by the company in due course should the proposed investment by EQT materialises,” the filing said.

Other than Leverage Success, Fraser & Neave Holdings Bhd is the other major shareholder of Cocoaland.

Leverage Success and F&N have 38.04% and 27.19% stakes respectively, in Cocoaland.

Through its subsidiaries, Cocoaland is engaged in the manufacturing and trading of processed and preserved foods and other related foodstuffs. Its product brands include Lot 100, Chocopie, Fruit 10 and Mum’s Bake. The confectionery producer has a turnover of

In 2013, Leverage Success was said to had been in talks with Hong Kong-listed diversifed conglomerate Swire Pacific Ltd to dispose of its stake in Cocoaland, if the price was right. The deal was presumably off as there was no record of a change in major shareholdership in Cocoaland’s filings on the website following that.

In around the region, cocoa products manufacturer have also been acquisition targets recently such as Singapore-based Olam International and KV Asia Capital buying into Archer Daniels Midland Co’s cocoa business and Aaslt Chocolate Pte Ltd, respectively.

Also read:

Olam acquires ADM’s cocoa biz for $1.3b

KV Asia Capital picks stake in chocolate maker Aalst

 

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.