Jardine CCL makes third attempt to privatise Cycle & Carriage Bintang at higher price of RM2.70 per share

KUALA LUMPUR (July 14): Jardine Cycle & Carriage Ltd (Jardine CCL) is making a third attempt to privatise Cycle & Carriage Bintang Bhd (CCB) at a higher offer price of RM2.70 a share, compared with RM2.40 under its previous offer last year.

In a filing with Bursa Malaysia, CCB said it has received a notice for an unconditional voluntary take-over offer from Jardine CCL — which already owns 90.66 million shares or a 89.994% stake in CCB as at July 12 — to buy the remaining 10.08 million shares in the company.

This values the offer at RM27.22 million based on the price of RM2.70 per share.

The notice, issued by CIMB Investment Bank (CIMB IB) on behalf of Jardine CCL, said the new offer price is at a premium ranging from 2.34% to 20.75% above the market price and volume weighted average market prices of CCB.

It also represents a 12.5% increase over the previous offer of RM2.40, the bank noted.

CIMB IB said Jardine CCL made the latest offer because there is uncertainty on complying with Bursa Malaysia’s 25% public shareholding spread requirement. CCB’s public shareholding spread was 10.006%.

Jardine CCL does not intend to maintain CCB’s listing status. Hence, CCB will make an announcement upon Jardine CCL’s aggregate shareholdings crossing the 90% threshold, and trading of CCB’s shares will be suspended after five market days upon closing of the offer, said CIMB IB.

The bank said a successful delisting allows Jardine CCL and CCB to dispense with the compliance costs associated with maintaining the Mercedes-Benz dealer’s listing status.

“Such cost reduction measures are in line with the broader need to streamline and improve the operational efficiency of CCB, given the challenging economic and operation environment faced by CCB,” said CIMB IB.

Jardine CCL did not succeed in its takeover offer last year as it only managed to raise its shareholding to 88.04%, from 66.47%, even after the offer’s deadline was extended three times.

Jardine CCL's first attempt to privatise CCB in November 2019 was via a proposed selective capital reduction (SCR) and repayment exercise at RM2.20 per share.

At the time, minority shareholders blocked the privatisation with more than 10% of disinterested shareholders, including listed company Muar Ban Lee Group Bhd, voting against the SCR.

CCB’s shares, which gained 19.6% year-to-date, closed four sen or 1.5% lower at RM2.56 on Thursday (July 14), giving the group a market capitalisation of RM257.91 million.