YTL Cement Launches Unconditional Mandatory Take-Over Offer for CEPCO at RM2.60 per Share

Key Points for Investors

• Offeror: YTL Cement Berhad, Malaysia’s largest building materials group, via CIMB Investment Bank Berhad.
• Offeree: Concrete Engineering Products Berhad (CEPCO).
• Offer Price: RM2.60 in cash per CEPCO share, representing a significant premium over recent market prices.
• Offer Period: The offer is open until 5:00 p.m. (Malaysian time) on Wednesday, 13 May 2026, and may be extended.
• Status: The offer follows YTL Cement’s acquisition of a majority 53.49% stake in CEPCO.
• Mandatory Nature: The offer is unconditional and not subject to any minimum level of acceptance.
• Listing Intention: YTL Cement intends to maintain CEPCO’s listing on Bursa Malaysia.
• Compulsory Acquisition: YTL Cement does not intend to invoke compulsory acquisition even if acceptance exceeds 90%.
• Financial Capability: YTL Cement and its adviser confirm sufficient resources to complete the offer in cash.
• Rationale: The acquisition and offer are strategic, expanding YTL Cement’s precast and spun concrete product portfolio.
• Independent Advice: Mercury Securities Sdn Bhd has been appointed as the independent adviser for minority shareholders.

Full Details of the Offer

1. Background and Rationale

On 1 April 2026, YTL Cement entered into unconditional Share Purchase Agreements (SPAs) with multiple vendors to acquire a total of 39,917,579 CEPCO shares, representing 53.49% of CEPCO’s issued share capital. The acquisition price was RM2.60 per share, amounting to a total purchase consideration of RM103,785,705.40. This transaction was completed on 7 April 2026, making YTL Cement the majority shareholder of CEPCO.

The rationale for this acquisition lies in YTL Cement’s ambition to broaden its product portfolio in the precast and spun concrete segment, leveraging CEPCO’s established market presence in Malaysia and internationally. The move is expected to create strategic synergies within the YTL Cement Group, enhancing vertical integration and opening up new growth opportunities.

2. Offer Details

• Offer Price Premium: The RM2.60 offer price is at a premium of 39% over CEPCO’s last traded price before the offer (RM1.87), and up to 96.2% over the 1-year volume-weighted average market price (VWAMP) of RM1.3249. This represents a compelling exit opportunity for minority investors.
• Financial Metrics: The offer price implies a price-to-book ratio (PBR) of 2.22 to 2.30 times and a price-to-earnings ratio (PER) of 9.96 times, based on CEPCO’s latest audited financials.
• Settlement: Payment will be made within 10 days of valid acceptance, either via bank transfer (if details are registered with Bursa Depository) or by cheque/bank draft for others.
• No Compulsory Acquisition: Even if acceptances exceed 90%, YTL Cement will not invoke the right to compulsorily acquire the remaining shares, and intends to keep CEPCO listed.
• Public Shareholding Spread: If the public shareholding falls below 25%, YTL Cement and CEPCO will explore measures to restore compliance, such as share placements. However, there is no guarantee that the public spread can be restored or that the shares will not be suspended if Bursa Malaysia does not grant an extension.

3. Shareholder Actions and Price-Sensitive Matters

• Action Required: Shareholders who wish to accept the offer must complete and submit the Form of Acceptance and Transfer as per the procedures outlined in the document. Non-resident shareholders must take note of additional requirements.
• Distribution Adjustments: If CEPCO declares any dividends or distributions prior to the offer closing, the offer price will be reduced by the net amount of such distributions.
• Potential Suspension Risk: Should the public spread fall below the regulatory minimum and not be restored in a timely manner, CEPCO shares may be suspended from trading.
• Future Plans: YTL Cement intends to maintain CEPCO’s core business and has no immediate plans for major restructuring, asset disposals, or liquidation, though post-acquisition reviews may lead to rationalisation in future.

4. Financial Position and Resources

YTL Cement is a highly capitalised entity with total assets of RM11.6 billion and equity attributable to owners of RM4.3 billion as of 30 June 2025. The group reported robust revenue and profit growth over the last three years, with FY2025 revenue at RM6.2 billion and profit after tax of RM923 million. The company has a strong track record of dividend payments.

The principal adviser, CIMB, confirms that YTL Cement has sufficient financial resources to fulfil all acceptances under the offer.

5. Interests and Dealings

• Current Interests: Post-acquisition, YTL Cement owns 53.49% of CEPCO. Related parties (deemed persons acting in concert, or PACs) are also disclosed, with full transparency of interests.
• No Other Arrangements: There are no arrangements for offer shares to be transferred to other parties, nor any options, indemnity arrangements, or side deals involving the offer shares.
• No Irrevocable Undertakings: As of the latest practicable date, YTL Cement and its PACs have not obtained any irrevocable undertakings from other shareholders to accept or reject the offer.

6. Corporate Structure and Group Profile

YTL Cement Group is Malaysia’s largest building materials conglomerate with operations spanning cement, concrete, aggregates, drymix, and related construction materials, with an international presence in Singapore, Vietnam, Indonesia, UAE, and Finland. The group’s acquisition of CEPCO brings in a leading player in prestressed spun concrete piles and poles, further strengthening YTL Cement’s market position and supply chain integration.

Potential Price-Sensitive Implications

• The significant premium offered may prompt shareholders to tender their shares, potentially driving the share price towards the offer price.
• The commitment to maintain CEPCO’s listing offers comfort to minority shareholders but the risk of public spread non-compliance and potential suspension should be considered.
• The absence of a compulsory acquisition means a residual free float is likely, which could impact trading liquidity and price volatility post-offer.
• The offer price being the highest paid in the period and at a premium to historical prices may serve as a benchmark for valuation in the near term.

What Should Shareholders Do?

1. Carefully read the full offer document and the upcoming Independent Advice Circular from Mercury Securities, which must be dispatched by 4 May 2026.
2. Consider whether to accept the RM2.60 cash offer based on your own investment objectives and the recommendation of the Independent Adviser.
3. Take action by the closing date (13 May 2026) if you intend to accept the offer.
4. Monitor Bursa Malaysia announcements for any extension of the offer period or changes to the offer terms.

Conclusion

This mandatory unconditional take-over offer by YTL Cement is a key corporate event for CEPCO and its shareholders. The premium offered, the strategic rationale, and the intentions regarding listing status and future plans are all highly relevant for investors and could significantly affect CEPCO’s share price and trading dynamics. All shareholders are strongly encouraged to review the full documentation and seek professional advice as appropriate.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should review all official documentation and seek independent professional advice before making any investment decision. The author and publisher accept no liability for any losses arising from reliance on this information.

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