Kian Ho Bearings Acquisition Offer Set
Kian Ho Bearings Ltd. (Singapore) revealed details of a takeover offer from Tat Hong Holdings Ltd. led by CIMB-GK Securities Pte. Ltd.
Tat Hong already holds over 30% of Kian Ho's shares outstanding; the offer is to acquire all remaining shares for cash.
The provisional deadline (closing date) for Kian Ho's and its shareholders' response is May 15, 2007. The offer is mandated because Tat Hong crossed the 30% ownership threshold defined by the Singapore Code of Takeovers and Mergers. Tat Hong's offer, however, reportedly underprices Kian Ho shares by more than 9%.
Founded in Singapore 1956, Kian Ho manufactures bearings in China via Zhenjiang Zhongjian Bearing Co. Ltd., under the KOMEI brand. Kian Ho is reportedly Singapore's largest warehouse distributor and retailer of bearings and seals, the exclusive distributor for most key brands such as IKO, Daido and URB, but also carrying Timken, SKF, NTN, Koyo, NSK, Nachi, and others.
The company also operates subsidiaries under the names of Ascend Bearings Co. Ltd., Acker Machinery (Shanghai) Co., Ltd and SNB (Hong Kong). In total, Kian Ho's 2006 sales were SGD $93.2million (USD $61.5 million).
Although Kian Ho does very little in the OEM market, it essentially controls the lucrative heavy-duty replacement market in Singapore, servicing primarily heavy manufacturing, transportation, utilities, and oil and gas drilling markets. Sales offices are also in Malaysia and Taiwan, with sales extending across the Pacific rim to Europe, Africa, and North America.
Several Asian market experts contacted by eBearing believe Tat Hong's acquisition will go through if the offer price goes up, but many others believe it will not.
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