KUALA LUMPUR: Industrial label manufacturer Ideal Jacobs (M) Corp Bhd could see the entry of new shareholders after its major owner and directors actively pared down stakes in the company earlier last month.

In filings with Bursa Malaysia between May 31 and June 4, major shareholder, US-based Ideal Jacobs Corp (IJC), and directors Meng Bin and Hing Kin Tat disposed of a total of 21.65 million shares or 18.04% stake in the company.

The disposals by Meng and Hing were deemed interest, via shares transacted by their spouses. IJC disposed of 12.2 million shares in the local unit, paring down its stake to 30.38% from 40.55% while group CEO Meng reduced his deemed interest to 22.86% from 27.03%. Meanwhile, Hing sold his entire deemed interest of 4.46 million shares, equivalent to a 3.71% stake in Ideal Jacobs.

At the closing bell last Friday, trading volume of Ideal Jacobs jumped 38 times to 36.95 million shares from 976,300 shares a day earlier, while its share price rose 6% to 26.5 sen from 25 sen.

Subsequent to the share disposals by its directors and major shareholders, Ideal Jacobs had proposed a rights issue with warrants, and a proposal to exempt IJC from having to undertake a mandatory general offer if a poor take-up of the rights issue by other shareholders resulted in its interest in Ideal Jacobs crossing the 33% threshold.

The proposed exercise would involve an issuance of up to 60 million new ordinary shares of 10 sen each, together with up to 60 million free detachable warrants, raising a maximum of RM12 million for the company.

This was on the basis of one rights share for every two existing shares and one free warrant for every rights share subscribed at an indicative issue price of 20 sen each. The exercise price of the warrant would be announced at a later date.

The exercise was conducted in order to raise funds for land and property purchases, raise new working capital and expand Ideal Jacobs’ new production facility in China. Ideal Jacobs had recently bought a 51% stake in Awan Idaman Sdn Bhd (AISB), a photoluminescent paint and coating paint manufacturer, for RM50,050 from Mohd Nadjion Nasir.

“The investment in AISB is for the purpose of expansion of business in the future as Ideal Jacobs is able to adopt the photoluminescent technology to create labels or signages that glow up to 30 hours,” it said.

IJC, the parent of Ideal Jacobs, was founded by Morris Jacobs and started as a small printing firm in New Jersey, US and eventually evolved into a manufacturer of industrial labels and name plates. In 1990, Andrew Conrad Jacobs became the president of IJC and chairman of Ideal Jacobs Malaysia. Ideal Jacobs Malaysia holds 100% of Ideal Jacobs (Xiamen) Corp and 99.99% of Ideal Jacobs Corp (Thailand) Ltd.

This article appeared in The Edge Financial Daily July 9, 2012.