Catalist-listed JEP Holdings has received an unconditional cash offer from Mainboard-listed UMS Holdings, after the latter acquired 54.2 million shares in the company’s capital from Zee Hoong Huay for a consideration of $10.8 million, or 20 cents per share.
The number of shares represents around 13.1% of the total number of issued and paid-up shares of JEP Holdings.
The consideration was arrived at on a willing-buyer and willing-seller basis, which also took into account the prevailing market price of the shares.
The acquisition was completed on April 21.
Following the acquisition, UMS now owns 222.6 million – or 53.79% -- of the total number of issued and paid-up shares in JEP Holdings, and will make a mandatory unconditional cash offer for the remaining shares in the company at 20 cents per share.
The offer will be extended to all the issued and paid-up ordinary shares held by shareholders in the company, other than those held in treasury.
UMS says it does not intend to revise the offer price, or any other terms in the offer.
The offer price of 20 cents represents the highest price paid by UMS for JEP’s ordinary shares during the six-month period before April 21.
It also represents a 0.7% premium to the volume weighted average price (VWAP) of the shares traded for the one-month period before the acquisition on the SGX.
The price represents a 1.7% premium to the VWAP of shares trading for the three- and six-month period respectively.
The offer shares will be acquired with the right to receive any distribution for the record date which falls on or after April 21, which means the offer price payable to a JEP shareholder may be reduced according to the amount of the distribution.
If the offer settlement date falls on or before the record date, UMS will pay shareholders the unadjusted offer price per share, and will receive the distribution in respect of such shares.
According to the statement, the directors of UMS Holdings says the offer is an opportunity for the company to diversify beyond its traditional semiconductor business, “broaden its earnings stream and may provide synergistic benefits”.
UMS may explore business synergies with JEP Holdings and tap into growth opportunities in new markets.
It adds that it has no intention to make material changes to JEP’s existing business and its subsidiaries.
Following the takeover, JEP will remain listed. UMS says it does not intend to exercise its rights of compulsory acquisition under Section 215(1) of the Companies Act, where it has the right to acquire shares of shareholders who have not accepted an offer for their shares.
Luong Andy, who is a director of both UMS and JEP, will abstain from making decisions related to the offer.
As at April 21, UMS has received an irrevocable undertaking from Luong and his associates to reject the offer of 1.15 million shares, which will be valid till the close of the offer.
Shares in UMS Holdings last traded at $1.36 as at 4.46pm on April 21 before requesting for a trading halt. Shares in JEP Holdings closed 2 cents higher or 10% up at 22 cents on the same day prior to this announcement, which prompted a query from the SGX RegCo.
See: JEP Holdings triggers SGX query on 10% share price hike