Ajinomoto Malaysia’s parent company offers RM20 per share in privatisation bid

KUALA LUMPUR: Ajinomoto (Malaysia) Bhd’s (AMB) parent company Ajinomoto Co Inc (Ajico) has proposed to privatise the food seasoning manufacturer via a selective capital reduction and repayment (SCR) exercise at RM20 per share.

In a filing with Bursa Malaysia today, AMB announced that its board of directors received a letter from Ajico today notifying it of the proposal.

The proposed exercise involves a capital repayment of RM603.4 million, or RM20 per share, to entitled shareholders – shareholders other than Ajico – who collectively hold 30.17 million AMB shares or 49.62% of the total AMB shares in issue.

In its letter to the AMB board, Ajico also proposed a bonus issue of 571.1 million AMB shares by way of capitalising RM571.1 million from the company’s retained earnings, which will increase AMB’s issued share capital to a level sufficient to facilitate the proposed SCR. Ajico will waive its rights to the bonus issue.

Following the proposed bonus issue, AMB will undertake a capital reduction of AMB’s issued share capital by RM603.4 million, where all 30.17 million AMB shares held by the entitled shareholders and all 571.1 million bonus shares will be cancelled.

Ajico said it will continue to hold the remaining AMB shares in issue that are not cancelled, resulting in AMB becoming its wholly-owned subsidiary.

Ajico does not intend to maintain the listing status of AMB on the Main Market and will request AMB to submit an application to Bursa to withdraw its listing status.

According to Ajico, it has obtained minimal benefit from the listing status, as AMB has not undertaken any equity fund-raising activity from the capital market for more than 10 years.

“In addition, AMB continues to incur costs and allocate management time and resources to maintain its listing status on the Main Market of Bursa,” it said.

Ajico also said that the proposed SCR will provide greater flexibility for AMB to pursue its business objectives and enhance operational efficiency, including by streamlining and simplifying its corporate structure, without the need to allocate management time and resources to comply with regulatory requirements.

It also noted that the trading liquidity of AMB shares has historically been very low and the proposed SCR gives shareholders an opportunity to realise their holdings in AMB at a premium to the market price.

Trading of the shares in the food seasoning manufacturer was suspended today at the company’s request.

The announcement came after AMB’s share price surged more than 26% from April 8 and touched an intraday high of RM15.60 on June 10, its highest level in two years.

The stock was last traded at RM15.20 on Friday, valuing the company at RM924.1 million.

Trading will resume tomorrow.