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.