KUALA LUMPUR (July 24): REDtone International Bhd says today it has acquired a 0.17% stake in 7-Eleven Malaysia Holdings Bhd (SEM), which operates the 7-Eleven convenience stores in Malaysia, in the open market for RM2.62 million or at an average price of RM1.38 per share.

At the price, the shares were transacted at a 1.5% premium to SEM’s closing share price of RM1.36 today. Its market capitalisation stood at RM1.55 billion.

In a bourse filing today, REDtone said 1.9 million shares in SEM were crossed between July 21 and 24.

The latest transaction brings REDtone's shareholding in SEM to 2.6 million shares, representing a 0.23% stake. REDtone and SEM have a common shareholder in tycoon Tan Sri Vincent Tan Chee Yioun.

On June 9, SEM, via its wholly-owned subsidiary Convenience Shopping (Sabah) Sdn Bhd (CSSSB) completed a general offer cum compulsory acquisition on all the remaining shares in Caring Pharmacy Group Bhd not held by it. Post acquisition, Caring is now a 75%-owned subsidiary of CSSSB.

For the financial year ended Dec 31, 2019, SEM recorded a net profit of RM54.06 million with net assets of RM101.92 million.

REDtone noted that the prospects of SEM Group are highly linked with the dynamics of the retail industry in Malaysia.

"The SEM group’s performance is affected by Covid-19 pandemic as their stores in the malls were closed, while others were operating under restricted hours during the Movement Control Order period. In view that it is difficult to ascertain changes in consumer behaviour and how the economy will recover, the SEM Group has taken various marketing strategies to mitigate the impact on its sales and will continue to explore opportunities for growth in other channels and product offerings."

Over the past 52 weeks, SEM shares have been trading at between RM1.21 and RM1.50. Year-to-date, its share price has fallen 4.9% from RM1.43.

REDtone shares closed up 0.5 sen or 1.37% at 37 sen today, bringing a market capitalisation of RM285.99 million. A total of 3.07 million shares were done.