This follows its purchase of a majority stake in Tat Seng for
$17m
By Joyce Teo
Oct 6, 2005
The Straits Times
PSC Corp, which runs the Econ minimart and i-Econ chains, is making
a takeover offer for a company that makes and sells paper packaging
- Tat Seng Packaging Group - after spending $17 million to buy a
majority stake in the firm from two top executives.
PSC announced yesterday that it is buying 50.78 per cent of Tat
Seng, or 79.8 million shares, for $16.96 million, comprising 57.24
million shares from Tat Seng managing director Low See Pong as well
as 22.58 million shares from executive director Lim Lee.
This is based on 21.25 cents a share - which is at a discount of
about 7.61 per cent to the counter's last transacted price of 23
cents on Tuesday.
By acquiring more than 30 per cent of Tat Seng, PSC is required
under Singapore corporate law to make a takeover offer for the
remaining shares, also at 21.25 cents apiece.
PSC will fund the purchase and the offer with the sale of its own
shares last year, including a rights issue giving existing
shareholders the right to buy two shares for every five held for
5.5 cents each. The firm would also draw on $26.4 million raised
through the private placement of 220 million shares at 12 cents
each last year.
Mainboard-listed PSC was formed in 1974 as a central purchasing
body for members of the Singapore Provision Shops Friendly
Association.
In addition to its minimarts and food trading, logistics and
manufacturing operations, it now has core businesses in health care
and education.
Apart from its food division - which includes a retail network of
130 stores - it has a health-care consultancy and services arm
while its education business is focused on logistics and
supply-chain management training.
Its directors said Tat Seng offers PSC a chance to broaden its
earnings stream. The two businesses may also tie in well together,
they added.
PSC may explore ways to take advantage of Tat Seng's presence and
network in China to grow its business.
Tat Seng, which designs, manufactures and sells corrugated paper
packaging products according to customers' specifications, has
customers such as:
Matsushita Electronics;
Mentor Media;
Tee Yih Jia Food Manufacturing; and
KC Dat (Singapore).
It caters to various industries in Singapore and China, and has a
factory in both countries.
The acquisition will be completed on Oct 18. PSC said it has no
intention of taking Tat Seng private.
For the first half ended June 30, PSC's net profit rose 152 per
cent to $2.94 million on the back of an 11 per cent rise in
turnover to $83.1 million.