28/07/2011 (The Star) - The proposed merger of AIC Corp Bhd, Jotech Holdings Bhd and AutoV Corp Bhd will be done via a share swap that would be priced at a slight premium over the last traded market prices of all three companies, a source close to the deal said.

“Shareholders of all three companies will receive shares in a new company that will assume the listed status of one of the three companies, in exchange for their existing shares,” the source explained.

Another key aspect of the deal is that Datuk Goh Tian Chuan who has stakes in all the three companies, will not be selling out but will emerge as a major shareholder of the new company, named Temasek Formation Holdings Bhd (which is not related to Singapore's Temasek Holdings).

In a press invite issued to the media yesterday, a public relations firm acting for the offerors in the deal said that Temasek Formation would be holding a media briefing in regards to the proposed major corporate exercise involving Jotech, AIC and AutoV. It will make material announcements tomorrow that will lead to a “significant transformation of their respective business directions and policies”.

The source said the new core business of Temasek Formation would be integrated manufacturing, which is a combination of the businesses of all three companies.

While Jotech's core business is largely precision stamping, it has diversified into the mining and oil palm plantation segments.

Two years ago, it bought a 40% stake in British Virgin Island-based Rockhill Resources Ltd for US$2mil. Last November, it bought two private palm oil companies, Malgreen Progress Sdn Bhd and Cergas Fortune Sdn Bhd, for RM28.3mil.

AIC is in the semiconductor business and is the manufacturer of components used in consumer electronic products while AutoV is an autoparts supplier. The core businesses of all three companies are inter-related and complementary to one another.

The source said that the rationale for the merger was to boost and streamline the financial position, strength and resources of the merged entity so that it can have easier access to the capital markets as well as to realise the operational and administrative efficiencies of the firms.

Goh graduated from the Police College in Kuala Kubu Baru, Selangor. He served as senior police officer attached to the police headquarters in Kota Kinabalu, for 13 years.

He started his own business after leaving the police force in 1994. He joined Everise Ventures Sdn Bhd and a number of other subsidiaries of Repco Holdings Bhd in 1995. He also served as CEO of Cepatwawasan Group Bhd in 2005.

Goh has a direct stake of 6.48% in Jotech, 0.49% in AutoV and a 20.42% stake in AIC.

The shares of AIC, Jotech and AutoV were suspended effective from 9am on Wednesday to 5pm on Friday. As for their last traded prices, AIC, Jotech and AutoV closed Tuesday at RM1.49, 15.5 sen and RM2 respectively.

The companies have market cap of RM259.1mil, RM171.2mil and RM116.7mil respectively.