Changtian shares up 44% on takeover bid

United Tech makes $17.2m offer for plastic maker at $1.30 apiece

Shares of Changtian Plastic & Chemical shot up 44 per cent yesterday to close in on levels near the offer price of $1.30 made on Monday by its founders and major shareholders at United Tech Industries. The mainboard-listed stock closed 39.5 cents higher at $1.29 after a trading halt was lifted - a level not seen since January 2011.

On Monday evening, United Tech Industries made a $17.2 million takeover bid for the plastic maker at $1.30 apiece.

RHT Capital, on behalf of United Tech Industries, told the Singapore Exchange in a filing that the offeror does not intend to revise the offer price, although it reserves the right to do so in "a competitive situation".

The offer will be unconditional in all respects, RHT said. United Tech Industries is an investment holdings company incorporated in the British Virgin Islands on Feb 15 for the purpose of mounting this offer.

Mr Yang Qingjin is the sole director of United Tech, and one of its two shareholders, along with Mr Chen Yongfu. Mr Yang is also chairman of Changtian Plastic & Chemical, while Mr Chen - his brother-in-law - is deputy chairman.

United Tech Industries does not hold any shares of Changtian Plastic & Chemical as at the time of the offer. However, parties acting in concert with the offeror own about 79.93 per cent of the company.

United Tech Industries intends to delist and privatise the company.

Changtian Plastic & Chemical last month reported a net loss of 45,000 yuan (S$9,100) for the first quarter ended March 31, an improvement on the $1.8 million yuan net loss in the same period a year earlier. Revenue climbed 4.5 per cent to 10.1 million yuan. Changtian Plastic & Chemical noted market demand for some products remained weak.

While the average selling price of all product segments rose between 6.4 and 9.9 per cent, sales volumes of release papers and UV-cured release film fell significantly, though partially offset by a 55.3 per cent jump in sales volumes for adhesive tapes.

Loss per share for the quarter was 0.07 fen, much lower than the loss per share of 2.8 fen previously. Net asset value per share stood at 1,575 fen as at March 31, unchanged from as at Dec 31 last year.

A version of this article appeared in the print edition of The Straits Times on May 31, 2017, with the headline 'Changtian shares up 44% on takeover bid'. Print Edition | Subscribe