Malaysia: Tycoon Surin Upatkoon to take over garments maker MWE for $92.6m

Garments maker MWE Holdings' website.

Garments manufacturer MWE Holdings Bhd has received a takeover offer from tycoon Surin Upatkoon to acquire its entire business and undertaking including all assets and liabilities, for MYR391.4 million ($92.65 million) or MYR1.70 per share.

The takeover was offered via Upatkoon’s private vehicle Pinjaya Sdn Bhd on Monday. Upatkoon is the chairman of gaming group Magnum Bhd.

In the offer letter put up on Bursa Malaysia by MWE, Pinjaya said, the purchase consideration would be satisfied by way of MYR267.49 million cash, while MYR123.91 million would be left owing by Pinjaya to MWE as a deferred amount.

Pinjaya proposed that upon completion of the acquisition, MWE would declare a special dividend of MYR1.70 per share as capital repayment, after which all existing MWE shares would be cancelled.

Pinjaya intends to delist MWE on completion of the distribution.

MWE will also issue two new shares to Pinjaya at an issue price of MYR1 each, and the former’s share capital would be reduced to MYR2 comprising two shares, which will be wholly owned by Pinjaya.

Pinjaya already owns a 30.8 per cent stake in MWE, through which Upatkoon holds 0.34 per cent direct stake and a 32.62 per cent indirect stake. Pinjaya, together with Upatkoon and two other persons acting in concert (PAC) in the offer, collectively hold a 31.66 per cent stake in MWE.

The takeover offer, which remains open until December 10, will require the approval of MWE’s board of directors, except for Upatkoon, its shareholders at an extraordinary general meeting to be convened, and existing financiers. Upatkoon holds a position as non-independent non-executive director in MWE.

The board of directors said, they will be appointing the relevant advisers before deciding on the next course of action in respect of the offer.

MWE manufactures garments for customers, such as Nike, Lacoste, Oshkosh and Izod, and is also involved in property development, manufacturing and sale of electronic products, share registration, management, insurance agency, nominee services, and trading in optical and general products.

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