Kingboard offers $1.7b buyout

PCB maker in unsolicited bid to take over E&E after lifting stake to 27.6pc

Kingboard Chemical Holdings, which manufactures laminates and printed circuit boards (PCB), yesterday made a HK$1.7 billion unsolicited offer to buy the shares it does not hold in Elec & Eltek International Holdings (E&E).

Kingboard, which owns 27.66 per cent of E&E, offered to buy the remaining shares of the mainland's second-largest PCB maker at HK$1.90 per share, a 9.19 per cent premium over Tuesday's closing price. The cash offer is on condition that Kingboard gain more than 50 per cent of the company. E&E said its board was considering the offer.

This is not the first time Kingboard has tried to take over a PCB maker. In August, it offered to buy all the shares of Suwa International Holdings at a 36.36 per cent premium but the deal collapsed.

If yesterday's offer succeeds, Kingboard will make a mandatory unconditional cash offer for E&E's Singapore-listed subsidiary, Elec & Eltek International Co (EEIC), at US$2.85 per share, a 4 per cent premium over Tuesday's closing price.

Merrill Lynch said in a report the offer price of US$2.85 per share for EEIC was 'unattractive compared to our fair valuation of $3.50', but added that Kingboard's offer price for E&E was above fair value.

Kingboard valued the entire share capital of the company at HK$2.31 billion.