PARAGON Union Bhd today announced that it has received a notice of unconditional mandatory takeover offer from AKK Capital Sdn Bhd on Friday (Jan 22).
The offer was made via Hong Leong Investment Bank Bhd to acquire all the remaining ordinary shares in Paragon (excluding treasury shares) which are not already held by AKK for a cash consideration of 55 sen per share.
“This follows the share sale agreements on Jan 22 between AKK and five vendors to acquire a total of 39.98 million Paragon shares, equivalent to a 60.41% equity interest in Paragon for a total consideration of RM21.99 mil or 55 sen per share,” Paragon pointed out in a media statement.
“The total consideration will be satisfied entirely in cash.”
The offer price of 55 sen apiece represents a 47.6% or 50 sen discount to Paragon’s closing share price of RM1.05 on Jan 21 being the last full trading day prior to the offer.
Of the five vendors, AKK will acquire a 48.26% stake from Asia Avenue Sdn Bhd, Tan Choon Hock (5.18%), Kong Say Thor (4.21%), Lee Poh Ting (1.48%) and Lee Poh Yee (1.28%). Prior to this, Asia Avenue was Paragon’s largest shareholder.
Koon Hoi Chun is the sole shareholder and director of AKK.
“It is the intention of the offeror and ultimate offeror (Koon) to maintain the listing status of Paragon upon the completion of the offer,” noted Paragon.
“As such, if Paragon does not comply with the public spread requirement as a result of the offer, the offeror will work together with Paragon to explore various options or proposals to help facilitate Paragon to comply with the public spread requirement.”
In a filing to Bursa Malaysia, Paragon said an independent adviser will be appointed by the board in due course to provide comments, opinions, information and recommendation to its shareholders pursuant to Paragraph 3.06 of the Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the Securities Commission.
Listed in Bursa Malaysia in 1994, Cheras-based Paragon engages in the provision of management services. Its subsidiaries are engaged in the businesses of manufacturing and trading of automotive components and car carpets as well as manufacturing and trading of commercial carpets.
At 10.05am, Paragon was up 6 sen or 6.19% at RM1.03 with 568,500 shares traded, thus valuing the company at RM72 mil. – Jan 25, 2021
