KUALA LUMPUR (Dec 15): Low-profile confectionery manufacturer Apollo Food Holdings Bhd, whose share price has climbed 40% since the start of the year, said on Friday that it has requested for a trading suspension of its shares, which has been granted and will take effect next Monday, pending the release of “a material announcement”.
Apollo sought for the suspension under a listing rule — Paragraph 3.1(b)(iv) of Practice Note 2 (PN2) on Requests for Suspension of the Main Market Listing Requirements — that provides for companies to make such a request if they intend to make an announcement about a "notice of take-over being served" that is not known to the public.
“The board of directors of the company wishes to announce that Bursa Malaysia has approved the company’s request for suspension in the trading of its securities from 9am to 5pm on Monday (Dec 18), pending the release of a material announcement,” Apollo's filing read.
There has been much speculation in recent years about a potential acquisition of Apollo, which is based in Johor and specialises in the production of chocolate wafer products and layer cakes.
Apollo is 51.31%-controlled by Singaporean Liang Chiang Heng and his younger brother Liang Kim Poh, via their investment vehicle Keynote Capital Sdn Bhd.
Chiang Heng, 73, is Apollo's executive chairman. He joined the group in 1979, and was appointed managing director in 1996, before being promoted to his current role in 1998. Kim Poh, 62, is Apollo's MD. Appointed as an alternate director in 1996, he joined the board in 1998, before being redesignated to his current post in December 2017.
The takeover rumours gained traction due to the advancing ages of the company's major shareholders, and the absence of a clear succession plan. The speculation went so far as to suggest that the Liang family has appointed a local bank to actively explore and identify a suitable buyer for Apollo.
This is regardless of the fact that Chiang Heng's son, Liang Thong Guan, 43, is also in the business. Thong Guan is a technical director at the group's wholly-owned Apollo Food Industries (M) Sdn Bhd, and had over eight years of related working experience prior to joining the company in March 2013.
Chiang Heng and Kim Poh's brother, Liang Kim Tee, 69, was also part of the group's senior management. But he resigned as production director of Apollo Food Industries on June 30 this year.
Listed in 2000, Apollo is a strong household brand among schoolchildren in Malaysia.
Among its notable shareholders over the years was AmanahRaya Trustees Bhd, which was once Apollo's second largest shareholder with a 10.237% stake in Aug 2 this year. But the company dropped off the substantial shareholder's list on Oct 11.
Apollo shares closed at RM5.40 on Friday, up 50% from a year ago, for a market capitalisation of RM432 million.
Wave of M&A deals among consumer companies
There has been a notable rise in share transactions in Malaysia's consumer goods space in the past few years.
In 2018, homegrown kopitiam operator OldTown Bhd was taken private by Dutch coffee house Jacobs Douwe Egberts at RM1.47 billion.
In November 2021, premium supermarket chain Jaya Grocer saw a change in ownership back to its founder, the Teng family, who bought the entire stake from AIGF Advisors Pte Ltd.
A few weeks later, Grab Holdings Ltd, Southeast Asia’s biggest ride-hailing and delivery firm, announced the acquisition of Jaya Grocer in a deal said to be worth up to RM1.8 billion.
Also in November 2021, Philippines-based Universal Robina Corp acquired Munchy Food Industries from British PE firm CVC Capital Partners for RM1.925 billion, about double the RM998 million that CVC paid to buy the local biscuit maker just three years earlier in 2018.
More recently, in November 2022, self-made confectionery tycoon Liew Fook Meng and his family concluded the sale of their collective 40.65% interest in Cocoaland Holdings Bhd — after three attempts to cash out in 2015 — to Main Market-listed Fraser & Neave Holdings Bhd (F&N).
F&N, which previously held a 27.66% stake in Cocoaland, made the proposal in June last year to buy the remaining 72.34% stake in Cocoaland for RM488.15 million, cash, in a deal that valued the Rawang-based snack and candy maker at RM686.4 million.