Hap Seng to sell 50.82% Hafary stake under RM446.4m takeover offer

PETALING JAYA (Sept 28): Hap Seng Consolidated Bhd’s wholly owned subsidiary has undertaken to accept a conditional takeover offer for its 50.82% stake in Singapore-listed Hafary Holdings Ltd, a disposal valued at S$140.03 million, or about RM446.4 million.

Hap Seng Investment Holdings Pte Ltd (HSIH) holds 218.79 million Hafary shares and has given offeror 23 Capital Pte Ltd an irrevocable undertaking to accept its cash offer of S$0.64 per share, according to Hap Seng’s Bursa Malaysia filing on Monday.

23 Capital is a special purpose vehicle incorporated by Hafary shareholders Low See Ching, Low Kok Ann and Low Bee Lan, Audrey. The three have also undertaken to accept the offer for their shares. Together with HSIH’s stake, the undertakings cover about 89.96% of Hafary’s issued shares.

The offer is conditional on 23 Capital securing enough shares to exercise compulsory acquisition rights under Singapore law. Hap Seng expects the disposal to be completed by December 2026 if the offer closes successfully.

The S$0.64 offer price is 4.9% above Hafary’s last traded price of S$0.61 on Sept 25. HSIH originally acquired its stake at S$0.24 per share.

Hap Seng estimates a gross gain of about RM187.3 million from the disposal. Upon completion, Hafary will cease to be a group subsidiary and its financial results will no longer be consolidated.

The group intends to use RM445.38 million of the estimated RM446.38 million gross proceeds to repay borrowings within 36 months of completion. The remaining RM1 million is earmarked for disposal expenses.

Based on an assumed simultaneous repayment and the group’s average borrowing rate of 4.40%, Hap Seng estimates annual interest savings of about RM14.9 million after tax. Its borrowings stood at about RM6.9 billion as at Dec 31, 2025.

Hap Seng said it would forgo Hafary’s future earnings and dividends. Its share of Hafary’s profit for the financial year ended Dec 31, 2025 was about RM48.4 million, while dividends from Hafary amounted to about RM19.85 million.

Hafary trades in building materials including tiles, stone, wood flooring, sanitary ware and fittings.

Trading in Hap Seng Consolidated’s securities was halted at 9am on Monday (Sept 28) and resumed at 10am, according to a Bursa Malaysia listing circular.

..........

EdgeProp monthly brings you data, insights and solutions for an evolving market. Subscribe now for your free copy!