Modular to be taken private

Smart-chip manufacturer Modular Techcorp Holdings Bhd has received a conditional voluntary takeover offer from Orisure Sdn Bhd, a company wholly owned by its executive chairman Ibrahim Hussain.

Modular shares were suspended pending the announcement, which saw Ibrahim offering 20 sen cash per share for the 78.94% stake comprising 96.3 million shares he does not already own.

Hussain currently holds a 21.06% stake in Modular.

This means Orisure would be paying RM19.3 million to take the Mesdaq-listed company private. The offer price represents a 48.1% premium over Modular’s last traded price of 13.5 sen.

The offeror does not intend to maintain Modular’s listing status.

Bloomberg data revealed scant trading in Modular’s shares, which hit a 12-month high of 20 sen on March 17, 2008. Its 52-week closing low was 10 sen on June 17, 2008. The company has not been able to comply with the public shareholder spread requirement since June 22, 2007.

Its second-quarter results for FY2008 showed net profit and revenue declining year-on-year by 40.6% and 50.9% respectively, due to the lower number of smart cards sold. However, Modular boasts a fairly healthy balance sheet with RM18.5 million in cash and no borrowings.