LONBISC ... Feb10

It has proposed to acquire a 32% stake in poultry-based TPC for about RM7.68 million as it seek to ensure regular supply for its expanding cake confectionery business.

It was acquiring the stake, comprising of 25.6 million shares, from TPC executive chairman Yee Tiam Teck and managing director Jimmy E. Pian.

The price tag works to be 30 sen per share. LonBisc said the acquisition would be financed from its own funds.

Yee holds directly 14.35 million shares or 17.94% and indirectly, 15.87 million shares (19.84%) in TPC while Pian owns a direct stake of 13 million shares (16.25%) and indirectly, 14.4 million shares (18%) in TPC.

With a new expansion plan in its cakes products in 2010, LonBisc will require additional supplies of eggs a day. Therefore, TPC’s current capacity and its present customer base will dovetail with LonBisc’s present and future requirements. This proposed investment would result in annual substantial saving and it expected to recoup the investment within a reasonable number of years.

This investment would enable LonBisc to ensure an adequate, regular and continuous supply of eggs at “controlled price” to meet its ongoing expansion plans.

It would work with TPC to cross distribute its own range of products, which would be available in more outlets and reduce its distribution expenses.