LHN Logistics says China’s Milkyway Chemical keen to make an offer for it

A CHEMICAL supply chain service provider in China, Milkyway Chemical, intends to make a voluntary general offer for all the issued and paid-up ordinary shares in Catalist-listed LHN Logistics : GIH 0% at an offer price of S$0.2266 per share in cash.

The offer price represented a 34.9 per cent premium over LHN Logistics’ closing price of S$0.168 per share on Jun 1, and a 44.5 per cent premium over its volume-weighted average price per share for the six months ended Jun 1, LHN Logistics said in a bourse filing on Sunday (Jun 4).

LHN Logistics reported a net asset value of S$0.0783 per share as at Mar 31, 2023. It is a subsidiary of real estate company LHN Limited : 41O 0%, which owned 84.05 per cent of LHN Logistics’ shares as at Sep 30, 2022.

The offer is subject to the approval of LHN Limited’s shareholders by 5 pm on Aug 3, 2023, Milkyway said.

It has received irrevocable undertaking from Fragrance, which owns 54.04 per cent of LHN Limited, to vote in favour of the deal.

Written consent from JTC Corporation for the change in LHN Limited’s indirect ownership in Hean Nerng Logistics is also required before the offer is made, Milkyway added.

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Milkyway, a China-based logistics group mainly engaged in the provision of chemical supply chain services, was listed on the Shanghai Stock Exchange in 2018, and had a market capitalisation of 13.8 billion yuan (S$2.63 billion) as at Jun 1.

Its rationale for the offer was to realise “synergies, economies of scale, cost efficiencies, growth potential and access to a new market”.

Milkyway has “no intention” to introduce any major changes to LHN Logistics’ business, redeploy its fixed assets, nor discontinue the employment of any existing employees other than in the ordinary course of business, it said.

LHN Logistics was spun-off and listed on the Singapore Exchange’s Catalist board on Apr 29, 2022. To date, its share price has never risen above its initial public offering price of S$0.20 per share.

Shares of LHN Logistics closed at S$0.168 on Jun 1, down 1.2 per cent or S$0.002. LHN Limited’s counter closed at S$0.34 on the same day, down 4.2 per cent or S$0.015.