Major deals in Malaysia
Saturday November 29, 2008
Major deals in Malaysia
AIRASIA Bhd’s major shareholders are nearing completion of a deal to finance the privatisation of the company. It was reported that the airline’s major shareholder, Tune Air Sdn Bhd, is likely to announce a general offer soon.
The indicative offer price is said to be RM1.30 to RM1.35 a share. It will cost Tune Air RM2.14bil to RM2.22bil to buy the remaining stakes in the airline that it does not own. Tune Air now has 30.72% stake in AirAsia.
AirAsia made its debut on Bursa Malaysia in 2004 at RM1.25. The low cost carrier flies to more than 100 routes. Over the past six years of operation, it had carried over 50 million passengers and expanded its fleet from just two aircraft to 70.
TELEKOM Malaysia Bhd (TM), which owns 63.3% of VADS, is taking VADS private with a selective capital reduction and repayment exercise. This means that only shareholders other than TM will receive the payment.
TM is offering RM7.60 per share in cash for the privatisation, in an exercise that will involve a capital repayment to minorities after a proposed bonus issue.
Since its debut Bursa Malaysia’s second board in August 2002, VADS’ share price has risen 10 fold (post bonus issue and transfer to main board) and 13 times, taking into account the dividend payout.
However, through much of the time, between its debut and late 2005, the counter hovered around the RM1 level.
It closed at its all-time high of RM6.80 on the Friday prior to its day-long suspension to announce its privatisation.
Melewar Equities BVI, and persons acting in concert (PAC), issued a conditional takeover on oil and gas services and infrastructure engineering firm M3nergy Bhd for RM1.20 per share on Sept 12. Melewar presently has a 55.8% stake in the company.
The offer price represents a premium to average market price of 43% (last 90 days before announcement) and 44% (last 30 days). This makes the Melewar deal one of the most generous compared to other privatisation exercises executed during the year in terms of premium offered.
Harrison Holdings (Malaysia) Bhd
BUMI Raya International Holding Co Ltd made a mandatory general offer (MGO) for the remaining 36.26 million shares, or 57.46%, of Harrison Holdings (Malaysia) Bhd it does not own at RM1.20 each or a total of RM43.52mil.
The MGO was triggered when the Cayman Island-registered Bumi Raya bought 8.02 million shares or 12.7% of Harrison for RM9.62mil cash or RM1.20 a share, raising its stake in the company to 36.83% from 24.13%.
Bumi Raya’s offer of RM1.20 cash per ordinary share was a premium of 3.45% over the five-day volume-weighted average market price of RM1.16 per Harrison share.
Incorporated on April 27, 1990, Bumi Raya’s business activities comprise marketing, sales and distribution of consumer products, wines and building materials, as well as shipping, insurance and travel agencies.
Ranhill Utilities Bhd
ON Aug 28, Ranhill Utilities Bhd was delisted from the stock exchange after it was taken private at a price of RM3.50 per share.
Ranhill Bhd announced that its president and chief executive Tan Sri Hamdan Mohamad was taking Ranhill utilities private under a RM305.11mil takeover offer.
Hamdan and partner Ahmad Zahdi Jamil offered RM3.50 each for the remaining 87.17 million shares, or a 29.60 per cent stake, in RUB.
This offer price represents a 38 sen premium to RUB’s share price of RM3.12 at the time the announcement was made.
Some felt that the proposed takeover offer of Ranhill Utilities at RM3.50 cash a share was too low, being 31% below its net tangible assets (NTA), hence prompting some minority shareholders to take their grievances to the Minority Shareholder Watchdog Group (MSWG).
Boustead Properties Bhd
Diversified conglomerate Boustead Holdings Bhd privatised its 65% owned property arm, Boustead Properties at an offer price of RM5.50 per share, a premium of 18.5% to the latter’s last done price of RM4.64.
At the time of the announcement, Boustead Properties’ other shareholder was Lembaga Tabung Angkatan Tentera (LTAT), which owned 8.6%. LTAT was also the largest shareholder in Boustead Holdings, with a 57.5% stake or about 361.7 million shares.
Industrial Concrete Products Bhd
Offeror IJM Corp Bhd has proposed to issue new shares to privatise Industrial Concrete Products Bhd (ICP). Under the proposed voluntary general offer (VGO), ICP shareholders will receive cash plus new IJM Corp shares. IJM Corp is expected to issue 80.6 million new shares and make a RM34.9mil cash outlay funded through borrowings for the privatisation exercise.
For every 100 shares held in ICP, shareholders will get RM26 cash plus 60 IJM Corp shares, which would be issued at RM5.06 each. The issue price was the five-day weighted average market price of IJM Corp as at Sept 4.
Based on the issue price of RM5.06, the VGO values ICP shares at RM3.30, representing a 17% premium over ICP’s last traded price before the announcement was made on Sept 5.
Some observers had already argued that the offer was too low.
They felt that ICP deserved a higher valuation, given its promising earnings prospects. Its order book was strong despite the difficult local operating environment.
Aseambankers, however, felt that the offer was fair. It said that based on the consensus 2009 price/earnings ratio of 10.2 times for ICP, the offer was considered reasonable for a mid-cap under the current bearish situation.