JDE makes RM1.47b offer for OldTown

Singapore

DUTCH tea and coffee giant Jacobs Douwe Egberts (JDE) has put out a RM1.47 billion (S$487.73 million) offer to acquire Malaysian coffee company OldTown.

JDE is offering RM3.18 per share for the operator of OldTown White Coffee chain through its indirect wholly-owned unit Jacobs Douwe Egberts Holdings Asia, the companies said in a statement on Monday.

OldTown White Coffee has 232 outlets, including 189 stores in Malaysia and nine in Singapore. The others are spread across Indonesia, Australia, China, Hong Kong and Myanmar.

The offer price represents a 10.42 per cent premium over OldTown's last trading price on Dec 7, before the offer was announced.

It also marks a premium of 16.45 per cent over the volume weighted average market price of the shares for the five-day period up to and including the announcement.

OldTown shares closed 6.94 per cent up at RM3.08 on Monday.

The offer will be conditional once JDE receives acceptances from shareholders that will result in it holding more than 50 per cent of all OldTown shares.

JDE plans to delist the firm and take it private.

OldTown shareholders who account for 51.45 per cent of the company have agreed to accept the offer, said the statement.

They include Mawer Investment Management, which holds a 7.5 per cent stake as OldTown's biggest institutional investor, as well as OldTown group managing director and founding shareholder Lee Siew Heng, who has a 1.3 per cent stake.

The acquisition would be JDE's second such deal in Asia in recent years, following its S$1.45 billion buyout of Singapore-based Super Group and its famed 3-in-1 coffee mixes.

JDE - its brands include Jacobs, Tassimo, Douwe Egberts and Kenco - is part of European investment firm JAB Holding Company, which has built up a global coffee business through a string of deals over the past few years.

JDE chief financial officer Fabien Simon noted that OldTown has developed "an impressive footprint of fast-moving consumer goods and food and beverage business ... across the Asia-Pacific region".

"We see huge potential in the business," Mr Simon said, adding that the group will work with OldTown to rapidly grow the operations as part of the broader JDE platform.

Mr Lee said the acquisition will help take the company to the next level to "accelerate the creation of more shareholder value".

Evercore was the exclusive adviser to OldTown and the architect of the transaction. It was also the exclusive adviser to Super Group on its S$1.45 billion takeover by JDE.

Keith Magnus, chairman of Evercore for Asia, said: "Evercore engaged with JDE, who are very private, selective and measured in their approach, to develop this offer, which the founders could not refuse.

"The proposed offer unlocks substantial value for all shareholders."