KUALA LUMPUR (Jan 22): The poultry player Lay Hong Bhd confirmed that its major shareholder NH Foods Ltd (NHF) had acquired the 8 million shares of Lay Hong valued at RM40 million or RM5 per share yesterday.

Lay Hong replied to the bourse's query today that its Japan-listed partner NHF had on Jan 21 conducted a direct business transaction for the acquisition of 8 million Lay Hong shares at a crossing price of RM5.

"NHF will provide the necessary notice to the company in compliance with its obligations under the main market listing requirements of Bursa Securities," it said.

Lay Hong was responding to a report in the Star Biz, which had said a big block of Lay Hong shares were transacted at a steep discount to its market price. The report sparked speculation that either a new strategic shareholder, or newly minted substantial shareholder NHF has increased its stake in the company.

"The off-market deal involving eight million shares translates to a 13.8% stake in Lay Hong and is valued at RM40 million at the crossing price of RM5," the report said.

Lay Hong had on Jan 11 announced it was placing out a 10% stake worth up to RM30.52 million to NHF and that it was planning to set up a joint venture (JV) with the latter.

The JV will primarily be involved in the manufacturing and sale of further processed food, besides carrying out research and development of further processed foods, and involve an initial estimated investment of between US$12 million and US$20 million.

Shares in Lay Hong rose 6 sen or 0.74% to close at RM8.18 today, for a market capitalisation of RM468.9 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)