Ajinomoto (Malaysia) Bhd’s board has resolved to table a RM603.41 million selective capital reduction and repayment (SCR) proposal to shareholders, offering RM20 per share. If approved at an extraordinary general meeting, the move will see the food seasoning manufacturer become a wholly owned subsidiary of Ajinomoto Co, Inc and delist from Bursa Malaysia by early 2027.
Privatisation Terms and the RM20 Offer
Ajinomoto Co, Inc Offers RM20 Per Share to Consolidate Ownership of AMB
The proposed privatization of Ajinomoto (Malaysia) Bhd (AMB) marks a significant shift for the company, which has long been a staple in the food seasoning market, particularly for its monosodium glutamate (MSG) products. Under the terms announced by the board, controlling shareholder Ajinomoto Co, Inc (Ajico) will pay RM20 in cash for every share held by minority investors. This offer values the total capital reduction at RM603.41 million.
The deal aims to acquire and cancel 30.17 million shares currently held by minority shareholders, representing approximately 49.62% of the company’s equity. According to filings with Bursa Malaysia, Ajico does not intend to maintain the company’s listing status once the transaction concludes. By consolidating its ownership, Ajico will shift AMB from a publicly traded entity to a wholly owned subsidiary. As of July 10, Ajinomoto Malaysia had an issued share capital of RM65.1 million comprising 60.8 million shares.
Rationale for Delisting and Shareholder Exit
RHB Investment Bank Bhd Advises the AMB Board on the Privatisation Strategy
The board of AMB has formally accepted the proposal after reviewing advice from its independent adviser, RHB Investment Bank Bhd. Maybank Investment Bank Bhd was also appointed as the principal adviser to Ajinomoto Malaysia for the proposed SCR. The board, save for interested directors, deliberated on the contents of the proposal letter from Ajico before resolving to move forward.
In justifying the move, AMB highlighted several factors that support the privatization strategy:
- Trading Liquidity: The company noted the historically low trading volume of its shares, which can make it difficult for investors to enter or exit positions without impacting the stock price.
- Premium Pricing: The RM20-per-share offer provides minority holders a chance to realize their investment at a premium to the market price.
- Minimal Listing Benefits: The board acknowledged that there is minimal benefit from maintaining its listing status on the Main Market of Bursa Malaysia Securities Bhd.
The Path to Completion and Voting Requirements
Disinterested Shareholders Must Approve the SCR Proposal at an EGM
The transition is not yet guaranteed. It requires the support of disinterested shareholders at an upcoming extraordinary general meeting (EGM). To pass, the proposal needs approval from at least 75% of the votes cast by these shareholders, provided that votes against the resolution do not exceed 10% of the voting rights held by the disinterested group.
Ajico and the interested directors will abstain from voting at the EGM and have committed to ensuring that persons connected with them will also abstain from voting to ensure the process remains impartial. The company stated:
“On completion of the proposed SCR, Ajico will continue to hold the remaining 30.62 million AMB shares that are not cancelled pursuant to the exercise, resulting in AMB becoming a wholly-owned subsidiary of Ajico.”
Board of Directors, Ajinomoto (Malaysia) Bhd
Market Reaction and Timeline
Bursa Malaysia Securities Receives the Delisting Request for Early 2027
Ajinomoto Malaysia’s shares surged 25% to RM19 on June 23, the first trading day after the privatisation proposal was announced. As of Tuesday, July 21, the stock closed at RM18.90, reflecting a market capitalization of approximately RM1.15 billion.
Looking ahead, the timeline for the delisting is contingent on regulatory approvals, including an order granted by the High Court and any required consents from financiers, third parties, and regulators, where applicable. Following the completion of the proposed SCR, Ajico will request that AMB submit an application to Bursa Malaysia Securities to delist the company and withdraw its listing status. Barring any unforeseen circumstances and subject to all relevant approvals being obtained, the company expects the entire selective capital reduction process to be completed in the first quarter of 2027.
Sources: Theedgemalaysia, Thestar.
