This article first appeared in The Edge Malaysia Weekly on June 29, 2026 - July 5, 2026

THE privatisation offer for Ajinomoto (Malaysia) Bhd (KL:AJI), disclosed on June 22 by its largest shareholder Ajinomoto Co Inc, by way of a selective capital reduction (SCR) and repayment exercise could easily be thwarted by minority shareholders.

An analysis of the shareholders shows that just a couple of funds or family investment vehicles could block the deal as they collectively own more than 10% of the shares of eligible shareholders.

For an SCR to go through, the deal must be approved by shareholders collectively owning 75% of the shares, excluding those of the offeror, and with no more than 10% of shares voting against the deal.

According to Ajinomoto Malaysia’s shareholding list in its 2025 annual report, the company has an incredibly fragmented minority base with no single institution holding more than 5%.

Public Mutual Bhd, through various funds, owns 1.89 million shares, or around 6.26% of the minority float. Chinchoo Investment Sdn Bhd — the investment vehicle of the Gan Teng Siew family — owns 1.21 million shares or 4.01% of the minority float.

For the deal to go through, 75% of the 30.17 million units of minority shareholders’ shares must vote for it, and not more than 10% of the minority float against it. Public Mutual and Chinchoo alone have more than 10% of the minority float eligible to vote on the offer.

Already, analysts and market players are saying that the RM20 per share cash offer undervalues the producer of food seasonings, as it assigns Ajinomoto Malaysia an implied enterprise value to earnings before interest, taxes, depreciation and amortisation (EV/Ebitda) of about 8.05 times.

This multiple sits below the historical average range of 11 to 13 times EV/Ebitda for consumer staples, they say.

“Companies like Ajinomoto with defensive cash flow and strong brand moat protection typically are valued at much higher premiums than eight times,” says a market observer.

The RM20 per share cash offer implies a market value of RM1.22 billion for Ajinomoto Malaysia and an enterprise value of RM873.42 million, after deducting its hefty cash and liquid investment buffer of RM347.74 million. Its trailing 12-month Ebitda is RM108.5 million.

While not exactly comparable, Nestlé (M) Bhd (KL:NESTLE) was valued at EV/Ebitda of 22.88 times as at Dec 31, 2025. However, Dutch Lady Milk Industries Bhd (KL:DLADY) was valued at 9.78 times as at Dec 31, 2025.

The head of research of a local research house states that while it is generally true that consumer staples are valued at between 11 and 13 times EV/Ebitda, there are significant tiered valuations among them, depending on each company’s liquidity.

“[The offer] can be better I suppose but we are all guided by reference on the historical share price range,” the head of research says.

As at the final quarter ended March 31, 2026, Ajinomoto had a net tangible asset (NTA) value of RM14.04 per share. The parent company’s privatisation offer of RM20 per share represents an approximate 42.4% premium on this NTA value per share, or 1.42 times.

It is also 31.57% above the pre-suspension price of RM15.20 and 30.68% to 49.93% across historical periods ranging from five days to one year. The offer values the company at roughly 16.9 times trailing 12-month earnings.

Ajinomoto Malaysia reported strong financial results for its fiscal year ended March 31, 2026 (FY2026), bouncing back strongly from previous cyclical pressures. It reported a RM71.45 million net profit during the year, a jump of 43.9% from FY2025.

An independent analyst called the offer an “opportunistic lowball” and urged shareholders to hold out for RM26.20.

“At face value, the 31.6% premium to the undisturbed price of RM15.20 appears reasonable. In substance, it captures minority value at a trough-cycle PE (price-earnings) applied to a structurally improving franchise, funded in part by the target’s own balance sheet,” the independent analyst writes in a report circulated to the media.

The analyst says the offer implies 16.9 times trailing earnings — at a 62% discount to the parent’s 44.4 times multiple and below the 18 to 25 times range at which comparable Malaysian consumer staples transactions have been completed in recent years.

Ajinomoto Malaysia is the parent’s principal production and distribution hub in Southeast Asia. This makes it more valuable to the parent, which gives it material long-term reasons to complete the deal, the analyst notes.

The privatisation attempt for Ajinomoto Malaysia draws parallels with DKSH Holdings (Malaysia) Bhd’s (KL:DKSH) failed privatisation deal.

In April 2026, DKSH’s Swiss parent DKSH Holding Ltd attempted to privatise the Malaysian unit via an SCR at RM6.15 per share, which was at a 16.7% premium to the company’s last traded share price prior to the offer.

However, activist minority fund manager Pangolin Investment Management openly declared the price a bargain-bin valuation, given DKSH’s massive net cash balance sheet.

This resulted in an overwhelming 87.47% of shares of disinterested minority shareholders voting against the proposal at the extraordinary general meeting.

In 2024, the largest shareholders of Grand Central Enterprises Bhd (KL:GCE), Tan Chee Hoe & Sons Sdn Bhd and Hotel Grand Central Ltd attempted to privatise the hotel operator of the Grand Continental brand.

Tan Chee Hoe and Hotel Grand Central, which together hold a 72.65% stake in GCE, made a buyout offer to purchase the remaining shares at 46 sen apiece, valuing the company at RM90.62 million. Despite the rationale for privatisation, minority shareholders who collectively held 10.76% of the company’s shares voted against the proposal.

In May 2019, Tunku Datuk Yaacob Khyra, who controls 38.6% of MAA Group Bhd (KL:MAA) via Melewar Group, attempted to take it private via an SCR at RM1.10 per share.

Institutional fund managers and the Minority Shareholders Watch Group flagged that the offer was at a 40.9% to 47.1% discount relative to the company’s true underlying asset and fair value. The deal fell through after minorities used their collective voting blocks to reject the resolution. 

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