KUALA LUMPUR (Jan 26): DKSH Holdings (Malaysia) Bhd (KL:DKSH) has decided to table its selective capital reduction and repayment (SCR) proposal to minority shareholders, after its non-interested directors concluded deliberations on the RM249.1 million privatisation plan put forward by its major shareholder.
The board said in a bourse filing on Monday (Jan 26) that the non-interested directors resolved to present the SCR for shareholder consideration, following advice from the independent adviser Asia Equity Research Sdn Bhd.
The decision came after DKSH Holdings announced on Jan 23 that it had secured an extension until Jan 30 to respond to its controlling shareholder, DKSH Resources (Malaysia) Sdn Bhd, on whether it would table the proposal.
Under the offer announced on Dec 9 last year, DKSH Resources — which holds 74.31% of DKSH Holdings — is seeking to take the group private at RM6.15 per share in cash, covering 40.5 million shares or 25.7% of its issued capital.
The offer represents a 16.7% premium to the pre-announcement share price but sits below the group’s book value of RM6.74 per share.
Minority shareholder Pangolin Investment Management, which owns 2.71% of DKSH Holdings and more than 10% of the minority float, has objected to the proposal, saying the offer “lacks merit” and is too low.
Its stance could complicate the SCR’s approval, which requires at least 75% support from disinterested shareholders, with no more than 10% voting against.
As part of the SCR mechanics, DKSH Holdings will undertake a bonus issue of up to 125.5 million shares to raise its share capital to a level that allows the proposed capital reduction.
These bonus shares will be cancelled immediately upon issuance and will not be credited into shareholders’ accounts.
The offeror intends to fund the repayment via internally generated funds, bank borrowings and a loan from DKSH Resources.
CIMB Investment Bank Bhd, as the appointed principal adviser for the proposed SCR, has confirmed that the privatisation will not fail for lack of funding and that all entitled shareholders will be paid in cash.
If completed, DKSH Holdings will become a wholly-owned subsidiary of DKSH Resources and will be delisted from Bursa Malaysia. The group expects the exercise to be completed in the third quarter of 2026, subject to shareholder approval and court confirmation.
DKSH Holdings’ shares have risen more than 12% following news of the privatisation, closing up three sen or 0.51% at RM5.95 on Monday, valuing the group at RM938.07 million.