LHH ... Jan 2009

It is venturing into oil palm cultivation via the proposed acquisition of a 35% stake in a plantation company, Alam Muhibah Sdn Bhd (AMSB), for RM33.9 million cash.

It signed a conditional agreement with the vendors — CW Lau & Sons Sdn Bhd, Datuk Lau Bong Wong, Lau Joo Han, CN Lau & Sons Sdn Bhd, LCN & Family Sdn Bhd, Datuk Lau Eng Guang, Lau Joo Yong, HN Lau & Sons Sdn Bhd and LTN Resources Sdn Bhd — for the acquisition of the stake comprising 1.23 million shares in AMSB.

It also signed an irrevocable call option agreement with the vendors to acquire another 744,813 AMSB shares, representing about 21.25% of the enlarged share capital of AMSB, thereby potentially raising its stake to 56.25% that would enable it to consolidate the earnings of, and exert further control over AMSB.

Leong Hup said the proposed acquisition formed part of its plan to diversify its earnings base to reduce dependency on its existing core business of poultry farming.