KUCHING: Kim Hin Industry Bhd is no more complying with the minimum public shareholding spread requirement of 25 per cent as this had fallen to 24.22 per cent on August 14.
This drop in public shareholding spread was due to more minority shareholders having accepted the offer price of 85sen per share from controlling shareholders Kim Hin (Malaysia) Sdn Bhd (KHSB) and company’s executive chairman Chua Seng Huat (joint offerors) in their bid to privatise the ceramic tile manufacturer.
The shortfall in the public shareholding spread was a direct consequence of valid acceptances pursuant to the offer and the dealing of Kim Hin shares by Chua during the period of the offer, Kim Hin said in a filing with Bursa Malaysia.
“The shortfall may increase further as a result of additional valid acceptances until the offer is closed for acceptances on 22 August 2025 by 5pm or at a later date that may be announced,” added the company.
The public shareholding spread stood at 29.51 per cent when the joint offerors announced their privatisation bid.
Paragraph 8.02(1) of the Listing Requirements stipulates that a listed issuer must ensure that at least 25 per cent of its total listed shares (excluding treasury shares) are in the hands of public shareholders.
However, Bursa Securities Malaysia Bhd (Bursa Malaysia) may accept a percentage lower than 25 per cent of the total number of listed shares (excluding treasury shares) if it is satisfied that such lower percentage is sufficient for a liquid market of such shares.
In the offer document, the joint offerors, via their principal advisor UOB Kay Hian (M) Sdn Bhd, have made it clear that they do not intend to maintain the listing status of Kim Hin on the Main Board of Bursa Malaysia. As such, they will not be taking any steps to address the shortfall in the public shareholding spread in the event Kim Hin does not meet the requirement after the closing date of the offer.
Based on the listing rules, the non-compliance of the public shareholding spread would not automatically result in the delisting of a listed issuer from the official list of Bursa Malaysia.
In the event that the joint offerors receive valid acceptance resulting in 90 per cent or more of the listed shares in Kim Hin, the company will make an immediate announcement to Bursa Malaysia. Upon such announcement, Bursa Malaysia shall suspend the trading in Kim Hin shares immediately upon the expiry of five market days from the closing date. Thereafter, the joint offerors will procure Kim Hin to take the requisite steps to withdraw its listing status from the official list of Bursa Malaysia.
If the joint offerors fail to achieve the 90 per cent threshold but hold more than 75 per cent of the issued capital of Kim Hin, they intend to continue pursuing their plan to privatise Kim Hin through an “appropriate privatisation route” at the relevant time, subject to them being able to procure the necessary financing for such an exercise. They have not disclosed what the “appropriate privatisation route” will be.
On August 15, Chua acquired additional 1,867 shares from valid acceptance of unconditional voluntary take-over offer. This increased his direct shareholding in the company to 8,922,665 units (6.412%). He has an indirect interest of 86,189,825 shares (61.459%) in Kim Hin, bringing the total to 95,182,490 units (67.871%).
On July 4, 2025, the joint offerors launched a 85sen a share unconditional voluntary take-over for the remaining about 52.94 million shares or 37.75 per cent in Kim Hin which they do not already own. At that time, they collectively held 87.3 million shares (62.25%) of Kim Hin’s total issued shares of about 140.24 million shares (excluding treasury shares).
During the offer period, businessman Dato Chew Chiaw Ann surprising emerged as a substantial shareholder in Kim Hin after acquiring 9.41 million shares (6.71%) from the open market over several days.
The joint offerors announced on August 13 to extend the closing date of the offer by a week to August 22 from August 15.
Independent adviser NewParadigm has advised minority shareholders and non-interest directors to reject the 85sen per share offer as it is “not fair” and “not reasonable” as is far below the company’s fair value, notwithstanding the offer price is at a premium to the historical market prices of Kim Hin shares in the last two years.
Based on the asset-based valuation methodology using the revalued net asset value (RNAV) of Kim Hin share, NewParadigm said the offer price represents (i) a discount of RM2.25 or approximately 72.58 per cent per Kim Hin share of RM3.10, and (ii) a discount of RM1.03 or approximately 54.79 per cent to the latest unaudited net asset per Kim Hin share of RM1.88 as at March 31, 2025.
A valuation of Kim Hin’s property assets undertaken by Laureclap Sdn Bhd in April 2025 comes up with a net revaluation surplus of about RM170.72 million on 20 investment properties in Malaysia and Singapore.
Kim Hin’s three non-interest directors — Datuk Sim Kheng Boon, Khoo Soon Keng and Aw Tai Hui — have concurred with the findings of NewParadigm, and have also recommended minority shareholders to reject the offer price of 85sen per share.
Kim Hin said, if required, it will address the matter of the company’s shortfall in the public shareholding spread after the extended closing date of the offer.
