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Wednesday, March 12, 2014

Kianjoo: Two's a company, Three's a crowd


In November last year, Kianjoo received an offer from Aspire Insight Sdn Bhd to buy-out Kianjoo’s entire business undertaking, assets & liabilities for RM1.47 billion, effectively valuing Kianjoo at RM3.30 per share.

Aspire Insight Sdn Bhd is a SPV who whose members include EPF, Can-One Bhd’s former chief operating officer Chee Khay Leong and other unidentified partners.

The takeover exercise is a longer process which might take up to a year or more, requiring court approvals. Aspire Insight had until March 14 to complete its due diligence exercise and sign definitive agreements in relation to its proposed buyout offer of the assets and liabilities of Kianjoo.

This week, Kianjoo received a non-binding letter of interest (LOI) from Japan’s Toyota Tsusho Corp (TTC) to acquire a 51% stake in the can manufacturer for a tentative maximum price of RM3.74 per share.

TTC said the LOI was submitted after reviewing Kianjoo’s historical and current share price and was subject to the completion of a due diligence on Kianjoo and its related companies. The offer is subject to a due diligence, where TTC reserved the right to re-calculate the offer without any limitation.

When the offer was announced on Monday, Kianjoo shot up to RM3.50 but closed at RM3.41. Today, Kianjoo dropped further to close at RM3.35. I think that if Kianjoo were to touch RM3.30 (or go lower than that) tomorrow, it could be a good trading BUY. 

 
Chart: Kianjoo's weekly chart as at Mar 12, 2014 (Source: Tradesignum)  

While the TTC’s offer may be indicative, I am sure the offer from Aspire Insight is a firm offer. As such, the downside to the stock is at RM3.30 while the upside is 13% higher at RM3.74.
(Source: The Star, here & here) 

Note: 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Kianjoo.

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