Reverse takeover of Transocean aborted

KUALA LUMPUR: Transocean Holdings Bhd has aborted a RM140mil deal to take over container transportation Taipanco Sdn Bhd, which would have led to executive chairman Tan Sri Mohd Nadzmi Mohd Salleh ceasing to be the controlling shareholder.

In a filing with Bursa Malaysia, the logistics solutions provider and tyre dealer told Bursa Malaysia the conditional share sale and purchase agreement had been terminated on Friday due to non-fulfilment of the conditions precedent. 

The profit guarantee agreement with Taipanco’s vendors had also been cancelled, it added.

Transocean said the termination of the agreements was not expected to have any material financial impact on Transocean’s earnings per share and net assets per share.

Transocean had on March 14 inked the agreement to acquire 100% in Taipanco from three individuals. The Taipanco group has a fleet size of more than 200 prime movers with more than 700 units of trailers.

The purchase consideration of RM140mil was to be satisfied by issuing new ordinary shares and redeemable convertible preference shares (RCPS), which would see the sellers having a collective shareholding of 55.25% of Transocean’s enlarged issued share capital.

Assuming full conversion of all the RCPS, their combined shareholding would increase to 64.64%, while Nadzmi’s stake would be diluted to 14.76% from 65.16%.

The vendors planned to seek approval to be exempted from undertaking a mandatory takeover offer.

Giving the rationale for the proposals, Transocean said the group’s financial performance had been deteriorating over the past four years and the proposed acquisition would allow it to revitalise its business and improve its lacklustre financial performance.

If the conditions precedent were not fulfilled or waived by the cut-off date of Nov 30, 2017, the share sale agreement would terminate and be null and void.

Transocean’s announcement did not say why the agreement was cancelled a month earlier than the original cut-off date or what was the condition precedent that was not met.

Last month Transocean reported a 69% drop in net unaudited profit to RM146,000 for the first half year ended June 30, 2017. compared with the corresponding period last year. Its overall logistics business posted a pre-tax loss of RM60,000 during the six-month period while its tyre trading business made a profit of RM241,000.