Broadway Industrial Group has announced its intention to undertake a delisting exercise by way of a selective capital reduction, in which all 17,265,407 shares will be cancelled in consideration of 26.2 cents per share.
The selective capital reduction entails the cancellation of all shares held by shareholders of the company other than the controlling shareholders. If this is effected, a sum of about $4.523 million will be returned to shareholders.
As at the date of this announcement, the controlling shareholders are Patec Precision Industry, Yida Investments – the holder of 28.87% of the shares in Patec Taiwan – and Wee Hong Jie, the sole shareholder of Yida Investments.
This follows the close of the mandatory conditional cash offer made by Patec Pte Ltd, the controlling shareholder, on Dec 23, 2024, after the group purchased a collective stake of 196,964,849 shares in Broadway Industrial Group for 19.7 cents apiece on Oct 28, 2024.
Patec is wholly-owned by Patec Precision Industry, a company listed on the Taiwan Stock Exchange which provides engineering solutions to the metal-forming industry.
The exit offer price of 26.2 cents per share represents a premium of 37.89%, 37.17%, 42.39% and 69.03% above the volume-weighted average price (VWAP) per share for the 1-month, 3-month, 6-month and 12-month periods respectively prior to and including Oct 25, 2024.
The board of Broadway Industrial Group says that it has sufficient financial resources to fund the aggregate cash distribution to return to eligible shareholders.
It adds that Patec had stated its intention to make the company a wholly-owned subsidiary, and it was part of its strategic initiative to acquire control of a manufacturer of precision-machined components with footprints in Thailand, China and Vietnam.
Broadway Industrial Group says that it expects hard disk drive market demand to soften slightly due to ongoing geopolitical uncertainties, persistent global tariff issues and continuing US China trade tensions. With the company as a private company, the group will be better positioned to navigate these challenges, it adds.
