KUALA LUMPUR: The tussle for control of the board of Kian Joo Can Factory Bhd (KJCF) may happen immediately after Can-One Bhd pays for its 32.9% stake in KJCF and has the shares transferred from Kian Joo Holdings Sdn Bhd (KJH).
According to sources, Can-One, upon getting the KJCF shares, is set to call for an EGM to install its own directors at the country’s largest can manufacturing outfit.
“It is not clear if Can-One wishes to retain some of the existing directors of KJCF. But speculation is rife that they will go against the members of KJCF’s founding See family, who make up half the board now,” said a source.
Out of KJCF’s nine directors listed in its 2010 annual report, four are members of the See family — Datuk See Teow Chuan (who recently retired as managing director at 71 years of age) and his brothers Datuk Anthony See, See Teow Koon and See Tiau Kee.
“Anthony, Teow Koon and Tiau Kee are the only executive directors in KJCF. If they leave the company, there could be concerns over operational issues, at least temporarily,” said a market observer.
However, it is believed the See family will not give in easily should such a boardroom tussle occur. Apart from sentimental reasons, sources said the family feels that KJCF is worth much more than what it is trading now, and they have the resources to buy back a substantial block of KJCF shares on the open market, by utilising the sale proceeds to be received from Can-One. Meanwhile, the Employees Provident Fund, which is familiar with the See family, owns almost 9% equity interest in KJCF.
Can-One managing director Yeoh Jin Hoe and executive director Ooi Teik Huat were not available for comment at press time.
It is learnt that Can-One is in the process of lining up financing for the 32.9% stake in KJCF it is acquiring for RM241.12 million or at RM1.65 a share. The company is buying the stake from KJH, a See family vehicle that is under liquidation as a result of a longstanding family feud.
Can-One’s acquisition of the KJCF stake has faced many hurdles. One camp of the See family, led by Teow Chuan, disputed in court the validity of the tender exercise that was carried out by KJH’s liquidator KPMG in 2009. Can-One won the open tender for the 32.9% block in KJCF. It was not until last Thursday that the Federal Court ruled in favour of KJH’s liquidator and Can-One over the transaction.
At yesterday’s closing, Can-One’s shares rose 23 sen or 14.47% to close at RM1.82, while KJCF’s dropped eight sen or 3.64% to RM2.12. Can-One’s market capitalisation stood at RM277.4 million, while KJCF’s was three times larger at RM941.6 million.
Operationally, Can-One registered a net profit of RM20.01 million for the nine months ended Sept 30, 2011, on revenue of RM463.69 million. KJCF’s net profit and revenue were much bigger, amounting to RM89.75 million and RM793.54 million during the same period.
Market observers feel a boardroom fight is inevitable when Can-One gets the shares. While the Federal Court has cleared the path, there is still another sore point in the form of a “highly dilutive” bonus and rights issue that the present board of KJCF is trying to push through.
The exercise, which is still pending approval from the Securities Commission, doesn’t sit well with Can-One, which considers that it would prevent it from gaining firm control of KJCF.
This article appeared in The Edge Financial Daily, January 10, 2012.
According to sources, Can-One, upon getting the KJCF shares, is set to call for an EGM to install its own directors at the country’s largest can manufacturing outfit.
“It is not clear if Can-One wishes to retain some of the existing directors of KJCF. But speculation is rife that they will go against the members of KJCF’s founding See family, who make up half the board now,” said a source.
Out of KJCF’s nine directors listed in its 2010 annual report, four are members of the See family — Datuk See Teow Chuan (who recently retired as managing director at 71 years of age) and his brothers Datuk Anthony See, See Teow Koon and See Tiau Kee.
“Anthony, Teow Koon and Tiau Kee are the only executive directors in KJCF. If they leave the company, there could be concerns over operational issues, at least temporarily,” said a market observer.
However, it is believed the See family will not give in easily should such a boardroom tussle occur. Apart from sentimental reasons, sources said the family feels that KJCF is worth much more than what it is trading now, and they have the resources to buy back a substantial block of KJCF shares on the open market, by utilising the sale proceeds to be received from Can-One. Meanwhile, the Employees Provident Fund, which is familiar with the See family, owns almost 9% equity interest in KJCF.
Can-One managing director Yeoh Jin Hoe and executive director Ooi Teik Huat were not available for comment at press time.
It is learnt that Can-One is in the process of lining up financing for the 32.9% stake in KJCF it is acquiring for RM241.12 million or at RM1.65 a share. The company is buying the stake from KJH, a See family vehicle that is under liquidation as a result of a longstanding family feud.
Can-One’s acquisition of the KJCF stake has faced many hurdles. One camp of the See family, led by Teow Chuan, disputed in court the validity of the tender exercise that was carried out by KJH’s liquidator KPMG in 2009. Can-One won the open tender for the 32.9% block in KJCF. It was not until last Thursday that the Federal Court ruled in favour of KJH’s liquidator and Can-One over the transaction.
At yesterday’s closing, Can-One’s shares rose 23 sen or 14.47% to close at RM1.82, while KJCF’s dropped eight sen or 3.64% to RM2.12. Can-One’s market capitalisation stood at RM277.4 million, while KJCF’s was three times larger at RM941.6 million.
Operationally, Can-One registered a net profit of RM20.01 million for the nine months ended Sept 30, 2011, on revenue of RM463.69 million. KJCF’s net profit and revenue were much bigger, amounting to RM89.75 million and RM793.54 million during the same period.
Market observers feel a boardroom fight is inevitable when Can-One gets the shares. While the Federal Court has cleared the path, there is still another sore point in the form of a “highly dilutive” bonus and rights issue that the present board of KJCF is trying to push through.
The exercise, which is still pending approval from the Securities Commission, doesn’t sit well with Can-One, which considers that it would prevent it from gaining firm control of KJCF.
This article appeared in The Edge Financial Daily, January 10, 2012.
