KUALA LUMPUR (June 13): Rex Industry Bhd (KL:REX), a manufacturer and distributor of canned food, drinks and biscuits, said it has received a takeover offer at 10 sen per share from its new major shareholder.

ETA Industries Sdn Bhd had earlier on Friday acquired a 40.59% stake in the food canning company for RM26.81 million, or 10 sen per share, from Darmendran Kunaretnam and Daiman Taipan Sdn Bhd, according to a notice of takeover filed with the exchange. Included in the deal is the acquisition of 39.18% of Rex's total warrants at half a sen per warrant.

Under the takeover rules, ETA Industries is required to extend the offer to the rest of Rex Industry’s shareholders.

The mandatory offer involves acquiring the remaining 59.41% stake in Rex Industry at 10 sen per share, and the group’s warrants at 0.5 sen each.

The offer prices represent a 1% discount to Rex Industry shares' five-day volume-weighted average price (VWAP) of 10.1 sen, and a 70.06% discount to the three-month VWAP of its warrants of 1.67 sen.

The ultimate offeror in the deal is ETA Industries' controlling shareholder and chief executive officer Lim Chin Hui. They intend to maintain Rex Industry's listing on Bursa Malaysia. 

Rex Industry incurred losses in three of the last five financial years. In its latest third quarter ended March 31, 2025, the group made a net loss of RM2.65 million as opposed to RM492,000 a year earlier, mainly due to a one-off provision for obsolete and slow-moving inventories, as well as an impairment loss on trade receivables. Quarterly revenue fell 11.71% to RM31.43 million from RM35.6 million a year earlier, amid weaker demand in the Malaysian domestic market.

Rex Industry is expecting to continue facing rising cost pressures due to higher raw material prices, ongoing foreign exchange fluctuations, the uncertain global economic outlook influenced by US-imposed tariffs, subdued trade and consumer sentiment, and persistent inflationary headwinds. “These challenges may impact the group’s earnings and overall performance,” the company said when announcing its latest quarterly results.

Trading of Rex Industry’s securities was halted for one hour on Friday, from 2.30pm to 3.30pm, following the receipt of a notice of conditional mandatory take-over offer from ETA Industries.

At the time of writing on Friday, Rex Industry shares were trading one sen higher at 11 sen, valuing the group at RM72 million. The counter has changed little year to date.