POSSIBLE DISCLOSEABLE AND CONNECTED TRANSACTION
Offer to acquire all the ordinary Shares in
Lung Kee Metal Holdings Limited (listed on the SGX-ST)
|
THE OFFER
Terms of the Offer
Yeekon will make the Offer for all the LKM Shares not owned by it, in accordance with the Code.
The Offer will be extended to (i) all the issued LKM Shares owned, controlled, or agreed to be acquired by parties acting or deemed to be acting in concert with Yeekon in connection with the Offer and (ii) all new LKM Shares unconditionally issued or to be issued pursuant to the valid exercise prior to the close of the Offer of any Option granted under the LKM Share Option Scheme.
Offer Price
The Offer Price, when made, will be on the following basis:
| Share cum Cash Offer | : | One (1) New Company Share and S$0.46 in cash for each Offer Share |
| OR | ||
| Cash Alternative | : | S$0.80 in cash for each Offer Share |
Shareholders of LKM can either accept the Share cum Cash Offer (which is subject to Stock Exchange granting the approval for the listing of the New Company Shares) or the Cash Alternative but not a combination of the Share cum Cash Offer and the Cash Alternative.
The Offer Shares will be acquired by Yeekon fully paid and free from all charges, liens, pledges, options, encumbrances and any other third party rights or interests of any nature whatsoever and together with all rights, benefits and entitlements attaching and accruing thereto as of the date of this announcement and thereafter, including the right to receive and retain all dividends, rights and other distributions (if any) declared, paid or made by LKM on or after the date of this announcement (including any dividend which may be declared, paid or made by LKM in respect of the financial year ended 31 March 2002).
Share cum Cash Offer Pricing
The New Company Shares will be issued at a price equivalent to HK$1.46 each, which is determined based on the simple average market price of the highest and lowest traded prices of the shares of the Company on the Stock Exchange on the last trading day (10 May 2002) prior to the date of this announcement pursuant to the Code. This is equivalent to approximately S$0.34 (based on the exchange rate of S$1:HK$4.321 on 10 May 2002). The cash amount of S$0.46 for each Offer Share is the amount of the Offer Price in excess of the S$ equivalent of the issue price of each New Company Share.
Options Proposal
Yeekon will pay holders of such Options an option price in cash (determined as provided below) in consideration of such holders agreeing:
(a) not to exercise all or any of such Options into new LKM Shares; and
(b) not to exercise all or any of their rights as holders of such Options,
in each case from the date of their acceptance of the options proposal to the respective dates of expiry of such Options. Further, if the Offer becomes or is declared unconditional in all respects, holders of the Options who have accepted the options proposal will also be required to surrender all of their Options for cancellation. If the Offer lapses or is withdrawn or if the relevant Options cease to be exercisable into new LKM Shares, the options proposal will lapse accordingly.
The option price is computed on a "see-through basis". In other words, the option price in relation to any Option is the amount of the Offer Price in excess of the exercise price of that Option.
As at the date of this announcement, there were 11,668,750 outstanding Options held by the holders of the Options.
Irrevocable Undertakings
As at the date of this announcement, BVI, a wholly-owned subsidiary of the Company, is the registered owner of 187,500,000 LKM Shares, representing approximately 75.37 per cent. of the issued and paid-up share capital of LKM. There are 248,780,500 issued and paid-up LKM Shares as at the date of this announcement. Yeekon has received an irrevocable undertaking from BVI to accept the Offer in respect of their entire shareholdings in LKM. Mr. Siu Tit Lung, the chairman of LKM and the Company and Mr Siu Yuk Lung, the managing director of LKM and the Company and Mr. Mak Koon Chi and Mr. Wai Lung Shing, both directors of LKM and the Company have given an irrevocable undertaking to Yeekon to accept the Offer by way of cash only in respect of their entire shareholdings in LKM and to accept the options proposal in respect of their entire Option holdings. The irrevocable undertakings will lapse if the Offer for the Offer Shares is withdrawn, lapses or does not become unconditional.
The acceptance of the Offer by BVI in respect of its irrevocable undertaking will be by way of cash only in order to avoid BVI owning any shares in the Company.
As at the date of this announcement, the directors of LKM have the following direct interests in LKM:
LKM Shares
Name No. of LKM Shares Approximate % Siu Tit Lung 2,375,000(1) 0.95 Siu Yuk Lung 2,375,000(1) 0.95 Mak Koon Chi 562,500 0.23 Wai Lung Shing 562,500 0.23
Note:
(1) Mr. Siu Tit Lung and Mr. Siu Yuk Lung jointly hold 1,875,000 LKM Shares and each owns a further 500,000 LKM Shares. In aggregate, they hold 2,875,000 LKM Shares representing 1.16 per cent. of the existing issued share capital of LKM. Mr. Siu Tit Lung and Mr. Siu Yuk Lung are brothers.
Options to subscribe LKM Shares
Name No. of Options Mak Koon Chi 1,687,500 Wai Lung Shing 1,687,500
Conditions of the Offer
The Offer will be subject to Yeekon having received, by the close of the Offer, valid acceptances in respect of such number of Offer Shares which, when taken together with the number of LKM Shares owned, controlled or agreed to be acquired by Yeekon (either before or during the Offer and pursuant to the Offer or otherwise), will result in Yeekon holding not less than 90 per cent. of the Offer Shares.
The Offer will, therefore, not become or be capable of being declared unconditional until the close of the Offer unless at any time prior to the close of the Offer, the Conditions are fulfilled.
Compulsory Acquisition
Under the Bermuda Companies Act, if the Offer has been accepted by the holders of at least 90 per cent. in value of the Offer Shares, Yeekon may compulsorily acquire all the LKM Shares of the dissenting shareholders, unless an application is made by a dissentient shareholder to the Supreme Court of Bermuda to object the compulsory acquisition.
After the close of the Offer, Yeekon intends to compulsorily acquire all the LKM Shares of any dissentient shareholders.
Offer Document
The offer document containing the terms and conditions of the Offer, and enclosing the appropriate form(s) of acceptance of the Offer, will be despatched to the shareholders of LKM not earlier than 14 days and not later than 21 days from the date of this announcement.
Consideration
The total consideration payable by Yeekon for the Offer Shares under the Offer will be approximately HK$224 million (excluding payment consideration for Offer Shares held by BVI). OCBC, as financial adviser to Yeekon, confirms that sufficient financial resources are available to Yeekon to satisfy full acceptance of the Offer by the holders of the Offer Shares, other than BVI. The payment consideration for the Offer Shares held by BVI will be made by way of an inter-company amount owing by Yeekon which will be approximately HK$648 million.
INFORMATION ON THE COMPANY
The Company was incorporated in Bermuda on 3 December 1992, its shares are listed on the Stock Exchange and has a market capitalisation of approximately HK$697 million as at the date of this announcement. The Company acts as an investment holding company and provides corporate management services. Its subsidiaries are principally engaged in the manufacture and marketing of mould bases and the trading of metal and parts. The directors of the Company are Mr. Siu Tit Lung, Mr. Siu Yuk Lung, Mr. Mak Koon Chi, Mr. Wai Lung Shing, Mr. Fung Wai Hing, Mr. Chan Chun Sing, Colin, Mr. Liu Wing Ting, Stephen and Dr. Lee Tat Yee.
INFORMATION ON YEEKON
Yeekon was incorporated in the British Virgin Islands on 24 April 2001 and has not carried on any business since its inception. It will be used principally as an investment holding company and has an issued and paid-up share capital of US$1.00 consisting of one ordinary share of US$1.00. Yeekon is a wholly-owned subsidiary of the Company. The directors of Yeekon are Mr. Siu Tit Lung, Mr. Siu Yuk Lung, Mr. Mak Koon Chi and Mr. Wai Lung Shing.
BACKGROUND AND INFORMATION ON LKM AND REASONS FOR THE OFFER
The Offer is being made to enable the Company to privatise LKM. It is not the intention of Yeekon to preserve the listing status of LKM. If Yeekon receives acceptances pursuant to the Offer in respect of 90 per cent. or more of the Offer Shares, it is the intention of Yeekon to exercise its right under the Bermuda Companies Act to acquire compulsorily those Offer Shares not acquired by Yeekon pursuant to the Offer. Yeekon will then proceed to delist LKM from the SGX-ST.
As disclosed in the announcement dated 5 June 1996 and the circular dated 12 August 1996, the Company carried out a restructuring exercise to streamline the activities of the group into two main businesses, that is, the manufacture and marketing of mould bases and the trading of metal and parts. The manufacture and marketing of mould base was undertaken by LKM and its group of companies, while the trading activities remained under the Company and its other group of companies. LKM was subsequently listed on the SGX-ST in January 1997 but remained as a subsidiary of the Company. The intention of the listing of LKM then was to enhance shareholders' value of the Company which it hoped to achieve by the separate listings of the Company and LKM. As at the date of this announcement, the market capitalisation of the Company is approximately HK$697 million (or equivalent to S$162 million) while the market capitalisation of LKM is approximately S$164 million. The Company believes that its original intention of enhancing shareholders' value by separately listing LKM on the SGX-ST was not achieved. In addition, with increased competition and the need for the Company Group to diversify its products and services, the Company believes that taking LKM private will give the Company more flexibility in utilising and deploying the resources of LKM within the Company Group.
The audited consolidated profit before and after taxation of LKM for the year ended 31 March 2001 were HK$148,952,965 and HK$127,199,856 respectively. For the year ended 31 March 2000, the audited consolidated profit before and after taxation were HK$130,581,351 and HK$110,877,683 respectively.
The audited consolidated net asset value of LKM for the year ended 31 March 2001 and 31 March 2000 were HK$616,878,204 and HK$546,839,378 respectively.
The unaudited consolidated profit before and after taxation of LKM for the six months ended 30 September 2001 were HK$54 million and HK$46 million respectively.
Pursuant to the Offer, shareholders of LKM are given the option to accept either the Share cum Cash Offer or the Cash Alternative. The Share cum Cash offer is being made to give shareholders the opportunity to participate in the shares of the enlarged Company Group following the privatisation of LKM and is subject to the Stock Exchange granting the approval for the listing and permission to deal in the New Company Shares. To facilitate the trading of the shares of the Company especially for shareholders who wish to accept the Share cum Cash Offer, an application will be made to the SGX-ST for the secondary listing of and quotation for all the shares of the Company (including the New Company Shares to be issued in connection with the Offer) on the official list of SGX-ST.
In the context of the above, the Company has decided to make the Offer through Yeekon with a view to making LKM its wholly-owned subsidiary.
GENERAL
OCBC is acting as the financial adviser to Yeekon in relation to the Offer.
Since the consideration for the Offer exceeds 15 per cent. of the consolidated net tangible assets of the Company as at 31 March 2001, if the Offer becomes unconditional, the Offer will constitute a discloseable transaction by the Company under the Listing Rules.
The acceptance of the Offer by the directors of the Company as described under the paragraph headed Irrevocable Undertakings will constitute connected transaction under the Listing Rules and requires disclosures under the Listing Rule 14.25(1). However, since such directors will accept the Offer by way of cash only, no approval by the shareholders in the general meeting of the Company pursuant to Listing Rule 14.26(3) is required.
Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, any New Company Shares pursuant to the acceptance of the Offer.
A circular containing, among other things, further details of the Offer will be despatched to the shareholders of the Company as soon as possible.
Trading in the shares of the Company was suspended from 9:31 a.m. on Monday, 13 May 2002 at the request of the Company pending the release of this announcement. Application has been made for trading in the shares of the Company to resume at 9:30 a.m. on Wednesday, 15 May 2002.
However, as the Offer may or may not become unconditional, investors should exercise caution when dealing in the shares of the Company.
INTERPRETATION
In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:
| "Bermuda Companies Act" | The Companies Act 1981 of Bermuda |
| "BVI" | LKM (BVI) Limited, a company incorporated in British Virgin Islands and a wholly owned subsidiary of the Company |
| "Code" | The Singapore Code on Takeovers and Mergers (as revised with effect from 1 January 2002) |
| "Company" | Lung Kee (Bermuda) Holdings Limited, a company incorporated in Bermuda, the shares of which are listed on the Stock Exchange |
| "Company Group" | the Company, its subsidiaries and associates |
| "Conditions" | the conditions which must be satisfied before completion of the Offer as set out under the heading "Conditions of the Offer" |
| "Hong Kong" | The Hong Kong Special Administrative Region of the People's Republic of China |
| "Listing Rules" | the Rules Governing the Listing of Securities on the Stock Exchange |
| "LKM" | Lung Kee Metal Holdings Limited, a company incorporated in Bermuda whose LKM Shares are listed on SGX-ST and an indirect subsidiary of the Company |
| "LKM Shares" | the ordinary shares of HK$1.00 each in the capital of LKM |
| "LKM Share Option Scheme" | the employee share option scheme of LKM |
| "New Company Shares" | new ordinary share of HK$0.10 each in the share capital of the Company |
| "OCBC" | The Oversea-Chinese Banking Corporation Limited, a Singapore-based financial service group whose shares are listed on SGX-ST |
| "Offer" | the voluntary conditional offer to be made by Yeekon to acquire all the issued and paid-up LKM Shares |
| "Offer Price" | the offer price of S$0.80, details of which are set out under the heading "Offer Price" |
| "Offer Shares" | the LKM Shares subject to the Offer and for the purpose of the Offer, shall include such new LKM Shares pursuant to the exercise of the Options under the LKM Share Option Scheme |
| "Option" | the options to subscribe for new LKM Shares granted under the LKM Share Option Scheme |
| "SGX-ST" | Singapore Exchange Securities Trading Limited |
| "Stock Exchange" | The Stock Exchange of Hong Kong Limited |
| "Yeekon" | Yeekon Limited, a company incorporated in British Virgin Islands and a wholly-owned subsidiary of the Company |
| "HK$" | Hong Kong dollars, the lawful currency of Hong Kong |
| "S$" | Singapore dollars, the lawful currency of the Republic of Singapore |
| "US$" | United States dollars, the lawful currency of the United States of America |
(In this announcement, S$ amounts are converted into HK$ amounts at the approximate current prevailing market rate of S$1=HK$4.321)
By Order of the Board of
Lung Kee (Bermuda) Holdings Limited
Wai Lung Shing
Director and Company Secretary
Hong Kong, 14 May 2002
| © Copyright 1996-2024 irasia.com Ltd. All rights reserved. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |