Hong Kong-listed Kingboard makes third privatisation bid for Elec & Eltek at HK$18 per share

HONG Kong-listed Kingboard is offering HK$18.07 per share, or US$2.33 at the current exchange rate, to take printed circuit board manufacturer Elec & Eltek International Holdings (E&E) private.

The offer price represents a 99.2 per cent premium to E&E's last transacted price of US$1.17 on March 24 on the Singapore bourse, and a 51.6 per cent premium to E&E's volume weighted average price over the last six months.

E&E is listed on both the Singapore Exchange (SGX) and the Hong Kong stock exchange (SEHK).

Trading of its shares has been halted since March 24 on SGX and March 25 on SEHK. They resumed trading on Friday, April 3.

As at 11.25am on Friday, after the announcement, the counter was trading on the SEHK at HK$17.12, up HK$6.52 or 61.5 per cent. On the Singapore bourse, the stock rose US$0.93 or 79.5 per cent to US$2.10.

The offer is conditional upon Kingboard receiving valid acceptances of 90 per cent of the shares it does not already own or have an interest in, which will allow Kingboard to compulsorily acquire all remaining shares. Failing this, the offer will lapse, 

Kingboard and parties acting in concert with it currently control 75.9 per cent of E&E.

The privatisation will cost Kingboard HK$891 million, if the offer is accepted in full by all shareholders.

Kingboard said it intends to continue E&E's existing businesses, retain employees, and develop synergies between E&E and businesses under its group.

It will also explore the possibility of re-aligning or re-deploying E&E assets and assess opportunities to enhance the circuit board-maker's financial flexibility.

In its filing, Kingboard said the low trading liquidity of E&E shares could make it difficult to divest scalable on-market disposals without adversely affecting the share price.

It added that its offer price provided an opportunity to redeploy the cash into other investment opportunities.

Kingboard, formerly known as Kingboard Chemical, is a laminate producer, printed circuit board manufacturer and supplier of chemical products in China.

It last made an attempt to take E&E private in 2009. It offered shareholders US$1.20 a share in cash or 0.45 in Kingboard shares, or a combination of both.

In 2004, it offered E&E shareholders US$2.85 for each of their shares.