Thursday, August 26, 2010

#Update* F&N to subscribe 23.08% new Cocoaland shares at RM1.38 each

KUALA LUMPUR: Fraser & Neave Holdings Bhd will subscribe for 39.5 million new COCOALAND HOLDINGS BHD [] shares or 23.08% at RM1.38 each.

This was sharply below Cocoaland's last traded price of RM2.87, based on the announcement made by Cocoaland on Thursday, Aug 26. The acquisition of the shares would amount to RM54.64 million.

'The issue price of RM1.38 was arrived on a negotiated basis,' said Cocoaland. The issue price represents a price-to-book ratio of approximately 1.64 times and 1.57 times over the audited and unaudited consolidated net assets per share of Cocoaland of RM0.84 as at Dec 31, 2009 and 88 sen as at March 31, 2010 respectively.

'Having considered the rationale for the proposed subscription and the benefits from the entry of F&N as a key shareholder of Cocoaland, the board is of the opinion that the issue price is reasonable to Cocoaland,' it said.

Cocaland said the board believed this strategic tie-up with F&N will broaden the group's growth prospects as well as open new horizons in terms of brand building, product and market development for Cocoaland Group.

'The board opines that having F&N as a strategic shareholder will generate greater shareholder value for Cocoaland,' it said.

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