This follows its purchase of a majority stake in Tat Seng for $17m
By Joyce Teo
Oct 6, 2005
The Straits Times
PSC Corp, which runs the Econ minimart and i-Econ chains, is making a takeover offer for a company that makes and sells paper packaging - Tat Seng Packaging Group - after spending $17 million to buy a majority stake in the firm from two top executives.
PSC announced yesterday that it is buying 50.78 per cent of Tat Seng, or 79.8 million shares, for $16.96 million, comprising 57.24 million shares from Tat Seng managing director Low See Pong as well as 22.58 million shares from executive director Lim Lee.
This is based on 21.25 cents a share - which is at a discount of about 7.61 per cent to the counter's last transacted price of 23 cents on Tuesday.
By acquiring more than 30 per cent of Tat Seng, PSC is required under Singapore corporate law to make a takeover offer for the remaining shares, also at 21.25 cents apiece.
PSC will fund the purchase and the offer with the sale of its own shares last year, including a rights issue giving existing shareholders the right to buy two shares for every five held for 5.5 cents each. The firm would also draw on $26.4 million raised through the private placement of 220 million shares at 12 cents each last year.
Mainboard-listed PSC was formed in 1974 as a central purchasing body for members of the Singapore Provision Shops Friendly Association.
In addition to its minimarts and food trading, logistics and manufacturing operations, it now has core businesses in health care and education.
Apart from its food division - which includes a retail network of 130 stores - it has a health-care consultancy and services arm while its education business is focused on logistics and supply-chain management training.
Its directors said Tat Seng offers PSC a chance to broaden its earnings stream. The two businesses may also tie in well together, they added.
PSC may explore ways to take advantage of Tat Seng's presence and network in China to grow its business.
Tat Seng, which designs, manufactures and sells corrugated paper packaging products according to customers' specifications, has customers such as:
Matsushita Electronics;
Mentor Media;
Tee Yih Jia Food Manufacturing; and
KC Dat (Singapore).
It caters to various industries in Singapore and China, and has a factory in both countries.
The acquisition will be completed on Oct 18. PSC said it has no intention of taking Tat Seng private.
For the first half ended June 30, PSC's net profit rose 152 per cent to $2.94 million on the back of an 11 per cent rise in turnover to $83.1 million.
If you look @ PSC
They now have
Cornell Education Group - Biz mgmt school
Econ - That famous minimart chain
iEcon - The newer version
Fortune Food Group - Does Sobe and Fortune products
Tipex Trading - Paper, Canned Food trading
Fresh Fruit Juices Manufacturing (M) - Maker of grass jelly and distribute the famous Golden Circle and Soyalite oil in MY
Health Solutions International - Hospitaility and mgmt
Radisson Playford Hotel - An Aussie hotel biz JV
Socma - Distibutor in MY
Tips - Maker of paper products in MY
Topseller - A major dist in SG
Clazzic Butchery - Meat dealing
InnoForm Media Pte Ltd - CD biz, with many Korean Drama VCD
Of which, InnoForm, TopSeller, Tipex, Fortune are the more familiar names in SG