KUALA LUMPUR: Dagang NeXchange Bhd (DNeX) has a new substantial shareholder in Taiwan's Foxconn Technology Group, which is the main assembler of Apple Inc's iPhones.
Foxconn, which is formally listed as Hon Hai Precision Industry Co Ltd, told the Taiwan Stock Exchange late last week that it had acquired 120 million shares or a 5.03 per cent stake in DNeX for RM108 million.
The group bought the DNeX shares from three substantial shareholders.
It acquired 22.64 million shares from Annedjma Capital Sdn Bhd for RM20.38 million, 96.36 million shares from one Azman Karim for RM86.72 million and one million shares from Arcadia Acres Sdn Bhd for RM900,000.
Foxconn, which has a market capitalisation of US$55 billion, paid 90 sen per share, with DNeX closing at 85.5 sen when the transaction was announced late on Thursday.
On Friday, DNeX gained half a sen or 0.58 per cent higher to 86 sen.
Industry sources said given Foxconn's magnitude and reputation, the transaction reflected a serious statement of intent on DNeX's vast potentials.
"Foxconn is not one for random acquisitions. Clearly, they have done their due diligence and see DNeX as a worthy investment," a market observer told the New Straits Times.
"Also, Foxconn's timely acquisition of a five per cent stake could be due to the new team on board at DNeX led by group managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir. Syed Zainal has decades of experience in the automotive sector, which is opportune for Foxconn given that they will be looking to explore the electric vehicles business through the stake in DNeX," the observer added.
The observer noted that with Foxconn on board, it would strengthen DNeX's turnaround plan for SilTerra Malaysia Sdn Bhd, adding more value to the stake acquisition.
DNeX and its Chinese partner Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Centre won the bid to take over SilTerra for RM273 million cash from Khazanah Nasional Bhd in March this year.
Foxconn said in its filing that it would work hand-in-hand with DNeX in the field of semiconductors and electric vehicles businesses.
"DNeX is on a growth trajectory with a focus on core growth segments of trade facilitation, system integration and consultancy, energy, telco and technology. DNeX will likely be able to leverage on Foxconn for its track record and capacity to add value to DNeX's varied businesses to fuel future growth. In the long run, minority shareholders will benefit," the source said.