Thursday, 8 March 2012

Flash: Founders : Offer price for Eng Teknologi could be revised lower

KUALA LUMPUR (March 8): The founders and major shareholders of ENG TEKNOLOGI HOLDINGS BHD [] who are in the midst of privatising the hard disk drive component maker, say they are still in talks financiers on the funding dynamics for the acquisition, and that the outcome could result in a lower offer price for the proposed takeover.

In a statement to Bursa Malaysia on Thursday, Eng Teknologi said its founders Datuk Teh Yong Khoon and Low Yeow Siang via private vehicle TYK Capital Sdn Bhd, had indicated that should the funding arrangements with lenders be finalised, the terms “will very likely” include an adjustment to the original offer price of RM2.50 a share. According to TYK, the final offer price could be adjusted to a level not exceeding RM2 a share.

“The board has not deliberated on the letter from TYK Capital and wishes to caution shareholders that pending the satisfaction of all conditions precedent in the SBA (sale of business agreement), the proposed disposal cannot be completed.

“Shareholders should be fully aware of the risks and rewards of investing in Eng Teknologi shares, particularly in the light of the letter from TYK Capital,” Eng Teknologi said.

TYK had served a takeover notice in July 2011 to acquire the business, assets and liabilities of Eng Teknologi. Cash proceeds from the disposal of the company’s undertakings to its founders will be distributed to entitled shareholders of Eng Teknologi.

Eng Tek’s share price was at RM1.77 at midday on Thursday.

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