BRDB to get takeover offer from Ambang Sehati

KUALA LUMPUR (July 31): Bandar Raya Developments Bhd (BRDB) is close to getting a takeover offer from its major shareholder, Ambang Sehati Sdn Bhd, at an indicative price of RM2.90 per share and RM1.80 per warrant.

In a filing with Bursa Malaysia yesterday, BRDB said Ambang Sehati was “in the midst of finalising the financing, including procuring the necessary approvals for the funding for a potential takeover”.

The move comes after Ambang Sehati, which holds an 18.5% stake in BRDB, failed in its bid to acquire a basket of property assets from the latter last year.

At RM2.90 per share, Ambang Sehati would need to fork out RM1.17 billion to purchase the remaining 81.5% equity interest it does not own in BRDB. The indicative price is a 14.6% premium over BRDB’s closing price of RM2.53 yesterday, but a 21.8% discount to BRDB’s net asset per share of RM3.71 as at March 31.

However, according to BRDB, the indicative price “is based on the estimated diluted net tangible assets per share in BRDB”. It is not known how many BRDB warrants are held by Ambang Sehati. The warrants closed at RM1.57 yesterday.

This is the latest move by Ambang Sehati after failing in its bid to acquire selected assets of BRDB Group last September for RM914 million, comprising RM430 million in cash and RM484 million in net liabilities.

The assets that were considered included Bangsar Shopping Centre, Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall. BRDB had said the sale would allow the assets to be monetised for a more efficient utilisation of capital. However a week later, it announced that the disposal of assets would be done via a tender process, in which Ambang Sehati would be invited to participate.

It also said an independent international property valuation firm would be appointed to manage the tender exercise. The move was considered a positive for minority shareholders as analysts opined that BRDB could get a higher price than what was offered by Ambang Sehati. However, there has been little news about the tender process since.

In November, Ambang Sehati indicated that it might increase its stake in BRDB, which might or might not result in a general offer. Ambang Sehati’s shareholders are Abdul Sathar M S M Abdul Kadir, Sascha Saleem Khan, Taina Aishah Khan and Datuk Mohamed Moiz J M Ali Moiz. Mohamed Moiz is the chairman of BRDB.

BRDB’s share price had risen 6.8% over the last six months to close at a 20-month high of RM2.53 yesterday.

This article appeared in The Edge Financial Daily on July 31, 2012.

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