KUALA LUMPUR (Nov 2): Prosper Trading Sdn Bhd's failure to initially recognise Australian-listed PRL Global Ltd and its wholly owned subsidiary as persons acting in concert (PACs) led to its collective shareholding in United Malacca Bhd (KL:UMCCA) crossing the 33% takeover threshold in September 2024, triggering a mandatory general offer (MGO) that was not made at the time.
The oversight only came to light in April 2026, following a detailed review with UOB Kay Hian (M) Sdn Bhd and legal advisers. In its compensation document filed on Monday, Prosper Trading said it had initially excluded PRL Global as a PAC because it was publicly listed, had a widely dispersed shareholder base and operated independently.
However, the subsequent review found that Prosper Trading, the joint ultimate offerors and their existing PACs collectively accounted for three of PRL Global's six board members, including its sole executive director. They also held more than 33% of PRL Global's equity.
This meant the joint ultimate offerors, brothers Tee Kim Tee and Tee Cheng Hua, were deemed to have control over PRL Global and its wholly owned subsidiary, Phosphate Resources (Malaysia) Sdn Bhd. Both companies were therefore classified as PACs in relation to United Malacca.
Prosper Trading is the offeror, while the Tee brothers are the joint ultimate offerors. Other existing PACs include Prosper Capital Holdings Sdn Bhd, Mergeboom (M) Sdn Bhd and Datin Seri Kalsom Ahmad.
Kim Tee owns a 0.95% direct and 45.36% indirect interest in United Malacca, while Cheng Hua holds a 0.24% direct and 35% indirect interest in the company. Their indirect interests are through Prosper Trading and Prosper Capital, among others.
PRL Global's ties with United Malacca
PRL Global, formerly known as CI Resources Ltd, is a diversified industrial company with international operations centred on phosphate mining and agribusiness.
The company had an existing business relationship with United Malacca, including recurring related-party transactions as at the financial year ended 2020.
On Nov 30, 2023, CI Resources emerged as a substantial shareholder in United Malacca after acquiring 13.02 million shares, representing a 6.206% stake, from its wholly owned subsidiary Cheekah-Kemayan Plantations Sdn Bhd.
Shortly after, PRL Global completed the sale of Cheekah-Kemayan to Prosper Trading for RM155 million, or A$50 million. A conditional sale and purchase agreement was signed in September 2023.
By July 2024, the company, which had since been renamed PRL Global, was listed as United Malacca's fourth-largest shareholder, with a 6.21% stake.
PRL Global ceased to be a substantial shareholder on April 9, 2026, after disposing of 7.94 million shares, based on the company's shareholding records.
How the 33% threshold was crossed
Following the discovery of the additional PACs, the parties reviewed United Malacca's shareholding records, including annual reports, records of depositors and contract notes dating back to June 2018, to establish when their collective stake first crossed the takeover threshold.
The review identified Sept 26, 2024 as the trigger date.
On that day, Kim Tee acquired 980,000 United Malacca shares, representing a 0.47% stake, at RM5.001 apiece. Prosper Capital Holdings acquired one million shares, or 0.48%, at RM5 each, while Mergeboom bought 100,000 shares (0.05%) and Kalsom acquired 150,000 shares (0.07%), also at RM5 each.
The combined acquisitions of 2.23 million shares lifted the group's collective stake from 68.45 million shares, or 32.63%, to 70.68 million shares, or 33.7%.
Crossing the 33% threshold triggered a conditional MGO obligation under subparagraph 4.01(a) of the Rules on Take-overs, Mergers and Compulsory Acquisitions. However, no offer was made at the time.
The review also found that the group's collective shareholding did not increase by more than 2% in any six-month period during the subsequent period. As a result, no further mandatory offer obligation arose under the relevant securities laws and takeover rules.
Cash compensation for affected shareholders
To address the missed takeover obligation, Prosper Trading and the Tee brothers are offering cash compensation to eligible United Malacca shareholders who sold their shares between 9am on Sept 26, 2024 and 5pm on Oct 9, 2026 for less than RM6.10 apiece.
Eligible shareholders can claim the difference between RM6.10 and their actual selling price for each share sold. For example, shareholders who sold 1,000 shares at RM5 each would be entitled to RM1,100 in compensation.
Eligible claimants include shareholders whose names appeared in United Malacca's record of depositors as at 5pm on Sept 26, 2024, as well as beneficial owners who purchased shares between 9am on Sept 25 and 5pm on Sept 26, 2024.
The offeror, joint ultimate offerors and their PACs are excluded from the compensation scheme. Claims must be submitted using the prescribed form by Dec 17, 2026.
The compensation will be funded by Prosper Trading and the Tee brothers, although brokerage fees, stamp duty and other transaction costs will not be reimbursed.
The RM6.10 offer price matches the highest price Prosper Trading paid for United Malacca shares in the six months before the commencement of the offer period, in accordance with takeover rules.
Meanwhile, the MGO for United Malacca shares not already owned by the offerors, at RM6.10 per share, will close on Nov 23, 2026. The Tee brothers intend to maintain the listing status of United Malacca.
Shares of United Malacca closed one sen or 0.16% higher at RM6.08 on Monday, giving the plantation group a market capitalisation of RM1.28 billion.