PE-backed group resumes pursuit of Malaysia's Yee Lee

The PE firm, working in conjunction with a shareholder group led by Dato Lim, Yee Lee’s co-founder and executive chairman, is offering to buy all outstanding shares for MYR2.06 apiece. As of June 2, they already owned 90.59% of the company. A day later, DAPE increased its holding from 32.99% to 33.23% through the purchase of shares on the open market, according to a filing. Breaching the 33% threshold meant what was previously a voluntary takeover offer became a mandatory one.

The offer represents a 3% premium to Yee Lee’s closing price on May 6, the last trading day before the revised bid was submitted on May 12. The previous offer, announced in April 2019, was for MYR2.33 per share. At that time, the consortium held a 58.4% stake, which rose to 90.59% through the open offer. The privatization did not move forward, although Yee Lee was in breach of rules requiring at least 25% of shares are held by public shareholders.

The company’s stock rose to MYR2.06 in response to the revised offer and remained at that level as of late morning trading on June 5. In March, it plunged 19% to MYR1.70 before recovering in early April.

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.

Yee Lee generated MYR1.12 billion in revenue in 2018, up from MYR1.09 billion the previous year. Over the same period, net profit fell from MYR39 million to MYR37.5 million, the third consecutive years of declines. The company blamed domestic and global uncertainty, notably the change of government in Malaysia and trade tensions between the US and China. Yee Lee was allowed to delay publication of its first-quarter results in response to COVID-19.

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 in 2018 at $450 million, seeks growth and control investments in companies with annual profits of $5-30 million.

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• Topics
• Southeast Asia
• Buyouts
• Consumer
• Malaysia
• Dymon Asia
• Agriculture