Dymon supports take-private of Malaysia’s Yee Lee
Dymon Asia Private Equity (DAPE) has backed a MYR186 million ($44.9 million) privatization bid for Yee Lee Group, a Malaysia-listed conglomerate with interests in food and agriculture, hospitality, logistics, and packaging.
DAPE will join a group of shareholders, including Yee Lee co-founder and executive chairman Dato Lim, representing a 58.4% interest in the company. They are offering MYR2.33 per share for the remaining 79.7 million shares. This represents a significant premium to the closing price of MYR1.94 on April 25, the last full day of trading prior to the announcement. Following a trading halt on April 26 Yee Lee opened at MYR2.31 on April 29 and remained around that level through morning trading.
Founded in 1968 as an edible oil packager, Yee Lee now manages a stable of consumer food and beverage brands in Southeast Asia including Sabah Tea and NeuVida cooking oil. The company controls the value chain for its brands from production on its plantations to processing and distribution. It also operates a resort hotel on the Sabah Tea plantation catering to Chinese and Western eco-tourists.
In its most recent annual report, Yee Lee recorded MYR1.08 billion for the year ended December 2017, up from MYR1.06 billion the year before. Over the same period, net profit fell from MYR44.5 million to MYR39.4 million. The company attributed the decline in profit to consumer pessimism due to rising costs of living and higher oil prices, resulting in restrained spending.
Yee Lee will be delisted if the offerors obtain the agreement of enough shareholders to pass 75% ownership; otherwise, the company will remain public. Malaysian regulators require at least 25% of the total shares in a publicly listed company to be held by the public.
DAPE targets opportunities in Southeast Asia across a range of sectors including retail, fast-moving consumer goods, food and beverage, and healthcare. Its latest fund, which closed last year at $450 million, seeks growth and control investments in companies with annual profits of $5-30 million.
Recent take-private deals by the GP include an offer last month to acquire Singapore-listed digital marketing services provider Challenger Technologies.
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