KUALA LUMPUR: ACE Market-listed Tejari Technologies Bhd’s single largest shareholder KOM2 Holdings Sdn Bhd has increased its direct holdings to 29.85% stake or 48.66 million shares, raising speculations that a takeover could be on the cards.

According to filings with Bursa Malaysia on Jan 29, KOM2 acquired 17.82 million shares, representing 10.9% stake in Tejari via off-market purchases on Jan 8. Tejari is principally involved in manufacturing hydraulic products.

KOM2 first emerged as a substantial shareholder in Tejari on Dec 9, after it acquired 25.49 million shares or 15.46% in the company via off-market and open market transactions.

The company had acquired the bulk of the shares from Komsama Holdings Sdn Bhd, which had ceased to become Tejari’s substantial shareholder. Subsequently, KOM2 accumulated its holdings in Tejari to 18.91%.

Information obtained from Companies Commission of Malaysia showed that KOM2 is an investment holding company owned by Tejari managing director and executive director Ooi Chai Huat.

With KOM2’s increased holdings in Tejari, Ooi’s stake in the company effectively rose to 32%, filings on Jan 11 revealed.

Under the Malaysian Code on Takeovers and Mergers, a shareholder with 33% or more holdings in the company will have to launch a general offer to acquire the remaining shares not already owned.

Meanwhile, between Jan 8 and 11, Tejari’s executive director Teoh Geok Cheng ceased to become its substantial shareholder after disposing of a total of 6.8 million shares or 4.3% via off-market.

Teoh still owns 1.95% stake or 3.18 million shares in the company.

In May this year, Tejari’s substantial shareholder Chan Ah Ba resigned as chairman and executive director of the company and disposed of 13.8 million shares representing an 8.5% stake in the open market.

The exercise reduced his direct stake to about 6.5 million shares or 3.98%, and indirect stake to 7.36 million shares or 4.51%, filings with Bursa Malaysia showed.

Tejari’s main businesses include designing and manufacturing of electro-hydraulic automation systems and products to the marine and oil and gas industries.

The company posted a net loss of RM2.44 million for the fourth quarter ended Nov 30, 2009 compared with a net profit of RM351,000 a year earlier, mainly due to a 49.3% decline in revenue to RM3.34 million from RM6.6 million.

Yesterday, Tejari closed unchanged at 15 sen with 445,600 shares traded.


This article appeared in The Edge Financial Daily, February 9, 2010.