Samko Timber Acquires Bioforest
Indonesia-based timber processing company, Samko Timber, announced on 2 April 2012, that it had entered into a sale and purchase agreement on 31 March 2012 to acquire a 100 percent stake in Bioforest from Temasek Life Sciences Ventures. Bioforest produces tree saplings for the plantation industry, and has the abilities to genetically duplicate elite tree candidates, thereby producing saplings that will have the same desirable characteristics of the mother tree. Bioforest has already planted 527 hectares of trees in South Sulawesi, Indonesia. The total consideration for the acquisition is approximately $7.4 million. Samko also intends to inject additional cash into Bioforest after the acquisition is completed. The injection of $2.8 million in cash will help Bioforest finance activities such as funding seedling and planting of trees activities. Samko opines that the activities of Bioforest represent certain synergies that Samko can leverage upon. The acquisition is also intended to support Samko’s long term strategy to move upstream into tree planting.
Significance: It is expected that the seedling technology provided by Bioforest will enable Samko to secure sufficient quality seedlings to support its plantation programme, and at a cheaper price as compared to open market purchases.
Tianjin Zhong Xin Proposes To Divest 2 Units
Tianjin Zhong Xin Pharmaceutical Group is seeking its shareholders’ approval in a second attempt to divest two non-core western medicine units. The pharmaceutical group intends to use the sale proceeds to build its core traditional Chinese medicine manufacturing business. Tianjin Zhong Xin is hoping that it will be able to garner sufficient votes for its plans after it provided more specifics in the use of the sale proceeds. The proposal will entail the sale of a 51 percent stake in Tianjin Central Pharmaceutical to Tianjin Lishen Pharmaceutical for Rmb255.5 million ($50.6 million) as well as a 10 percent stake in Tianjin Jinkang Pharmaceutical to Tianjin Pharmaceutical Group for Rmb 19 million. With the sales proceeds, Tianjin Zhong Xin intends to buy a 40 percent stake in Tianjin Hongrentang Pharmaceutical from Tianjin Pharmaceutical Group for Rmb211.7 million ($42.2 million). Tianjin Honrentang’s products are distributed in more than 40 Chinese provinces and regions.
Significance: The proposed acquisition of Tianjin Honrentang Pharmaceutical, will increase Tianjin Zhong Xin’s market share and customer base in Tianjin City, which is a key market for its traditional Chinese medicine products, as well as other parts of China.
Plaintiffs Withdraw Claim To Wind Up YES
Yik Kuen Koon and Eliza Gunawan, plaintiffs and minority shareholders of YES F&B Group, have withdrawn their claim to wind up the company which owns Dian Xiao Er. In addition, the two plaintiffs have also requested that the court strike out Soup Restaurant’s (SR) request to wind up YES. The plaintiffs had originally asked the court to wind up YES as an alternative to a buyout either by them or by SR. In the lawsuit, the plaintiffs who own 49 percent of YES, claimed that SR directors had acted in an oppressive manner towards them. They also argued that Yik’s removal as YES’s managing director was not valid while Gunawan’s resignation as executive director was the result of pressure from the board. SR, in its defense, said that the board had “lost trust and confidence in the plaintiffs’ integrity”. SR claimed that for YES’ FY07 to FY09, the plaintiffs had been paid amounts far exceeding amounts received by SR as shareholders.
Significance: After the dramatic turnaround, SR has indicated in a media communiqué on 2 April 2012 that it has made an open offer to either buy out the plaintiffs’ stakes in YES or to sell its own stake in YES to the plaintiffs.