PETALING JAYA: Cab Cakaran Corp Bhd has shown interest in buying some of Farm’s Best Bhd’s assets, including a poultry processing plant, six breeder farms and 28 broiler farms, for up to RM242mil.
Farm’s Best, a Malacca-based poultry farmer and property developer, told Bursa Malaysia yesterday that Cab Cakaran had sent separate letters of intent to three of its wholly-owned subsidiaries – Farm’s Best Food Industries Sdn Bhd (FBF), Sinmah Breeders Sdn Bhd and Sinmah Livestocks Sdn Bhd – to buy their assets.
By paying earnest deposits that must be refunded if no purchase deal is struck, Cab Cakaran wants to gain exclusive rights for at least nine months to carry out due diligence reviews and feasibility studies on the assets of the three units.
Cab Cakaran, believed to be the biggest poultry company in the peninsula’s northern region, is eyeing Farm’s Best assets in the central and southern regions. It is willing to pay up to RM80mil for FBF’s assets – a poultry processing plant in Alor Gajah, Malacca, a depot in Johor Baru and equipment (poultry processing equipment, refrigeration equipment, trucks and so on) located at six depots.
It is also looking at buying Sinmah Breeders’ land, building and equipment at six breeder farms and hatcheries in Malacca, Negri Sembilan and Johor for up to RM88mil. In addition, Cab Cakaran has set its sights on Sinmah Livestocks’ land, building and equipment at 28 broiler farms in Malacca, Negri Sembilan and Malacca, for which it will pay up to RM74mil. The three letters of intent are not inter-conditional and Farm’s Best units have accepted the terms as well as the earnest deposits yesterday.
Farm’s Best said it would ensure that the asset disposals would not be considered as disposals of its major businesses and would not result in the group having insignificant business or operations.
It noted that the group’s remaining operations and businesses in feedmill and the property division had generated and were expected to continue generating significant revenue. Cab Cakaran said the proposed acquisitions, which involved the addition of about 301.43 acres of broiler farms and about 200.22 acres of breeder farms as well as other poultry facilities and equipment, might boost Cab Cakaran’s broiler production capacity by about 2.11 million to 2.33 million birds per month.