This article first appeared in The Edge Malaysia Weekly on September 29, 2025 - October 5, 2025
SCIENTEX Bhd (KL:SCIENTX) could be closer to privatising its subsidiary Scientex Packaging (Ayer Keroh) Bhd (KL:SCIPACK) as two long-time shareholders who had previously objected to the idea appear more amenable now, going by their recent share transactions.
On Sept 12, Scientex announced its intention to take its subsidiary private through a selective capital reduction (SCR) and repayment exercise.
Coincidentally or not, the offer came exactly four years after Scientex had first attempted to take over SCIPACK, a plastic packaging company.
Now it seems that Scientex is a step closer to its goal given that the two substantial shareholders, who had been cool to the first attempt at privatisation in September 2021, have been paring their stakes in SCIPACK over the past year.
The two opposing shareholders then were Samarang Ucits-Samarang Asian Prosperity and Apollo Asia Fund Ltd. Apollo Asia had been a long-time shareholder of SCIPACK — since 2010 when the company was known as Daibochi Bhd. Samarang was a later investor of Daibochi, emerging in the company in 2017.
But both funds had invested in the company before Scientex acquired a chunk of Daibochi shares in a share swap in 2018. While both the funds had retaliated against the privatisation offer in 2021 by increasing their stakes in Daibochi — to 9.54% (Apollo Asia) and 5.095% (Samarang) — just two days after the offer, filings with Bursa Malaysia now indicate a change of heart.
The filings show that Samarang had been gradually disposing of its shares in SCIPACK in the last 10 months. The company had started off by selling 300 shares on Dec 3, 2024, thus reducing its stake to 19,047,560 shares from 19,047,860. This left it with a 5.43% stake, largely unchanged from its earlier position because of the small number of shares sold.
Nonetheless, by Sept 12 this year, the same day the second privatisation attempt was announced, Samarang had ceased to be a substantial shareholder after disposing of three million shares in SCIPACK. Samarang is estimated to now hold 16 million shares in the company, following this disposal of three million shares.
It is interesting to note that a mere six months before Dec 3, 2024, Samrang had been actively picking up small amounts of SCIPACK shares.
While Samarang is no longer a substantial shareholder in SCIPACK, Bursa filings show that Apollo Asia Fund had disposed of seven million shares in SCIPACK on Sept 12, leaving it with 29.13 million shares or 8.307% equity interest in SCIPACK.
The disposed shares appear to have been acquired by Scientex because filings on the same day show that its stake in SCIPACK increased by 10 million shares to 262.07 million shares, or a 74.75% stake.
It is unknown at this juncture at what price the shares were transacted. The question is, why did the funds have a change of heart? At the time of writing, The Edge had not received a response to an email sent to Apollo Asia regarding the takeover offer.
To be clear, the SCR offer of RM1.50 per share in the second attempt is much lower than the RM2.70 offered in the first privatisation attempt.
This time around, the proposed SCR will see entitled shareholders receiving a cash payment of RM1.50 per SCIPACK share, equivalent to a total cash sum of RM132.83 million. Thereafter, the shares held by entitled shareholders amounting to 88.55 million will be cancelled. The remaining 262.07 million SCIPACK shares that are not cancelled will continue to be held by non-entitled shareholders (or Scientex). This will pave the way for Scientex to own 100% equity interest in SCIPACK upon the completion of the exercise and SCIPACK will become a wholly-owned subsidiary of Scientex.
As at Sept 18, entitled shareholders collectively held 88.55 million SCIPACK shares, or about 25.25% of the company’s issued shares, while Scientex held a 74.75% stake following the 10-million-share acquisition that appeared to be from the funds.
Assuming that both funds are agreeable to the proposed SCR, a back-of-the-envelope calculation shows that Scientex could have at least 50.96%, or 45.13 million shares of the total held by the entitled shareholders on its side.
The proposed SCR is subject to the approval of the entitled shareholders of SCIPACK at an extraordinary general meeting, where a special resolution on the matter must be approved by at least the majority of the entitled shareholders and at least 75% in value to the votes attached to the SCIPACK shares owned by them. The value of the votes cast against the special resolution must not be more than 10% of the votes held by the entitled shareholders of the total voting shares in SCIPACK.
Justifying its offer price of RM1.50 apiece, Scientex said in a circular that it was at a premium of 5.86% to 8.89% to SCIPACK’s five-day, one-month, three-month and six-month volume-weighted average price (VWAP).
“Therefore, the SCR offer price presents the entitled shareholders with an opportunity to realise their investment in SCIPACK expeditiously at a premium to the market price of SCIPACK shares, which they may otherwise be unable to as the market price is lower than the SCR offer price,” it says.
Nevertheless, the offer is at a 5.84% discount to the one-year VWAP of SCIPACK shares, prompting the question if this signals Scientex’s confidence in privatising SCIPACK.
SCIPACK’s net profit has been trending downwards as market competition intensifies. In the recently concluded July 30, 2025, financial year (FY2025), its net profit amounted to RM26.88 million from revenue of RM712.19 million. The net profit was 17.4% lower year on year while revenue was marginally lower by RM1.32 million.
SCIPACK’s share price has dropped from the RM2.39 recorded when the first privatisation offer ended on Nov 8, 2021. Last Friday, it closed at RM1.42, giving the company a market capitalisation of RM497.9 million.
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