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KUALA LUMPUR (Feb 8): Losing XOX Bhd has proposed to buy a 29.43% stake in sportswear retailer Cheetah Holdings Bhd for RM44.62 million in cash.
XOX said that the purchase of 33.8 million shares at RM 1.32 per share would represent a 37.03% premium over the five-day volume-weighted average market price of Cheetah shares through February 3, 96.33 sen.
The purchase, through the wholly owned subsidiary XOX (Hong Kong) Ltd, of Chia Yoon Yuen Holdings Sdn Bhd will be financed with internally generated funds, XOX said in a presentation to Bursa Malaysia.
The group said it found the deal to be strong as the Cheetah brand “is a long-standing and institutionalized brand in Malaysia, and it fits well with the target market segment over which XOX has dominance (youth and low-income segment). ) “.
“By adapting to changes in the business environment, in addition to continually improving operational efficiency and minimizing costs, cross-selling Cheetah and XOX products will appeal to the youth market, which is XOX’s intention to focus on this. segment as the segment with the highest per capita spending on online purchases, ”XOX said.
This acquisition would also provide co-branding and product bundling synergy with XOX products and services, through its E-Commerce Marketplace and E-Sports ventures, the group said.
With the 20,000 XOX distributors, they can also immediately increase their product offerings by introducing Cheetah products. “The acquisition of a fundamental stake will allow access to shipping options, providing XOX distributors the ability to increase their sales and turnover, benefiting both companies,” added XOX.
XOX shares closed half a sen or 6.25% lower at 7.5 sen, valuing the group at RM282.54 million.
Cheetah was 9.5 sen or 9.5% lower at 90.5 sen, giving it a market capitalization of RM115.5 million. Over the past year, the shares have tripled from 30 sen.
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