KUALA LUMPUR (Dec 18): APB Resources Bhd is acquiring 70 million shares in Globetronics Technology Bhd, representing a 10.41% stake in the Penang-based semiconductor manufacturer, for RM140 million cash.

The consideration of RM140 million or RM2 per share is a 16% premium to Globetronics' closing share price of RM1.72 on Monday.

Upon the completion of the proposed acquisition, APB Resources will emerge as the second-largest shareholder in Globetronics.

In a bourse filing, APB Resources said it was acquiring the shares from General Produce Agency Sdn Bhd (6.89%, or 46.31 million shares) and Ng Kweng Chong Holdings Sdn Bhd (3.52%, or 23.69 million shares), vehicles of the Ng family that founded Globetronics, which confirms a report by The Edge weekly on Monday about the purchase.

In a separate statement, the fabricator of design engineering equipment said investing in Globetronics is a strategic and timely move considering the growth of the electrical and electronics (E&E) market in Malaysia.

“Globetronics, a key player in the EMS (electronics manufacturing services) and semiconductor sector, is well-positioned within the expanding E&E market in Malaysia. Our investment in Globetronics marks a strategic expansion into a high-growth industry,” it said.

APB Resources’ deposits, cash and cash equivalents stood at RM59.71 million as at end-September 2023.

APB Resources also intends to appoint a corporate representative to the board of Globetronics to solidify the group’s commitment and partnership.

“APB Resources expects to engage in equity accounting for this investment as an associate company, following a review with the group’s auditors.

“This approach will allow APB Resources to recognise a share of Globetronics' profits in line with the 10.41% equity interest,” it noted.

Additionally, the group said the financial move is anticipated to boost APB Resources' earnings and create an additional stream of income.

“As the second-largest shareholder, we look forward to contributing significantly to Globetronics’ future direction and success. This acquisition is not just an expansion of our portfolio but a leap into a future of enhanced earnings potential and a stronger presence in the tech sector,” it said.

Meanwhile, Globetronics said the change in its major shareholder is not expected to have any substantial or material impact on its day-to-day operations.

"GTB remains committed to maintaining operational continuity and delivering consistent performance despite the change in ownership structure," it said in a statement.

In addition, the disposal exercise is contingent on securing the approval of APB Resources shareholders at an extraordinary general meeting (EGM) to be convened.

Shares in APB Resources finished one sen or 0.37% lower at RM2.68, giving it a market capitalization of RM302.51 million.

Meanwhile, shares in Globetronics settled eight sen or 4.44% lower at RM1.72, giving it a market value of RM1.16 billion.