HK-listed firm buys 50% in Wang-Zheng Bhd, launches MGO

New high for Dagang NeXchange Bhd

KUALA LUMPUR: Hong Kong-listed Hengan International Group Co Ltd is making a mandatory takeover offer for Wang-Zheng Bhd after acquiring a majority stake in the diaper and sanitary product maker for RM91.2mil or RM1.14 per share.

Hengan International’s indirect unit Hengan (M) Investments Co Ltd had signed an agreement on Monday to buy 80 million Wang-Zheng shares, representing a 50.4% stake, from Wang-Zheng’s largest shareholder Wang-Zheng Resources Sdn Bhd (the vehicle of Wang-Zheng managing director and CEO Goh Kheng Jiu) and three others.

Wang-Zheng, whose brands include Drypro, Carina and Carefeel Cotton, told Bursa Malaysia that Hengan International was offering RM1.14 per share in cash but the price would be reduced by the amount of any dividend paid prior to the closing date.

Wang-Zheng had on April 12 announced a final dividend of 3 sen per share for the financial year ended Dec 31, 2016 (FY16). Hence any accepting holder whose name appears in the record of depositors of Wang-Zheng on June 30 (and is therefore entitled to the dividend) will receive an adjusted offer price of RM1.11.

Wang-Zheng’s share price closed 4 sen higher at RM1.14 on Monday. The price has gained 41% since the start of the year.

Hengan International group, which was set up in 1985, is involved in investment holding and, like Wang-Zheng, trading of personal hygiene products.

It intends to maintain Wang-Zheng’s listing status on the main market of Bursa Malaysia.
 
Wang-Zheng, which has been listed since Oct 21, 2004, and kept a low profile, posted a net profit of RM17.7mil in FY16, a 33% jump from the previous year, on revenue of RM309.05mil. The increase in profit was mainly due to gain on disposal of other investments derived from the disposable fibre-based products segment and an increase in revenue for the processed paper products segment.