KUALA LUMPUR: Fraser & Neave Holdings Bhd (F&N) has proposed to acquire the entire equity interest in Cocoaland Holdings Bhd it does not already own for RM488.15mil or RM1.50 a share.

       In a filing with Bursa Malaysia, F&N said the proposed privatisation, which is to be undertaken by way of members' scheme of arrangement, will involve the acquisition of 325.41 million Cocoaland shares held by the scheme shareholders, or about 72.34% of the share capital of the company.

       The food and beverage group holds the remaining 124.42 million shares in Cocoaland, which represents a 27.66% stake in the company.

       The offer price for the shares represents a price-to-book ratio of 2.77 times based on the net assets attributable to equity holders of RM243.32mil or 54 sen per share.

       Cocoaland's earnings before interest, taxation, depreciation and amortisation (Ebitda) for FY20 and FY21 came to RM32.8mil and RM33.53mil, implying an enterprise value to Ebitda ratio of 18.47 and 17.74 times respectively.

       According to F&N, it had received an irrevocable and unconditional undertaking from Leverage Success Sdn Bhd, the largest shareholder in Cocoaland with 40.65% stake, and its shareholders, to vote in favour of the scheme.

       The proposed privatisation, which F&N will fund via bank borrowings, is expected to be completed in the fourth quarter of 2022.

       An illustrative account in the filing shows F&N gearing following the completion of the proposed privatisation will rise to 0.2 times from the current 0.02.

       In its rationale for the purchase, F&N said the proposed privatisation is in line with its ambition to be a stable and sustainable food and beverage leader in Asean, with halal packaged food as its fourth pillar of growth.

       "The investment will add established Malaysian confectionery and snack brands to F&N’s portfolio of renowned brands, and at the same time serves as a platform to build on and expand into other packaged food segments.

       "F&N believes that the addition of Cocoaland into the F&N group will also enhance the group’s expansion in the overseas markets," it said.

       Bursa Securities approved Cocoaland's request for trading in its shares to be suspended on Friday in light of the material announcement. The share closed at RM1.28 a unit on Thursday.