In the short span of five months, Law has spent at least RM340 million to acquire local assets.
His latest acquisition is a 19.29% equity stake in property developer Perduren (M) Bhd for RM26 million, or RM1 per share, via a direct off-market trade on Wednesday.
It appears to be a good deal for Law. The shares were transacted at a hefty discount of 49 sen or 49% over Wednesday’s closing price of RM1.49. As at March 31, Perduren’s net asset per share was RM1.50.
Law bought the equity stake from Lien Hoe Corporation Bhd, which has an 11.37% shareholding in Perduren after the sale.
In an announcement to Bursa Malaysia, Lien Hoe said the shares were sold to an investment holding company called TS Law Group Sdn Bhd, whose shareholders and directors are Law and Datin Saw Geok Ngor.
Lien Hoe noted that the disposal was made because the equity interest in Perduren was not strategic to its long-term business direction.
The share purchase has Law emerging as the single largest shareholder in Perduren, followed by Meridian Hectares Sdn Bhd with 12.99% and Indaman Gembira Sdn Bhd with 12.2%.
Little-known Perduren, which has a market capitalisation of RM136 million, owns several commercial buildings in Johor Bahru and the Shamelin Business Centre in Cheras which generate recurring rental income.
For the nine months ended Dec 31, 2009, Perduren posted a net profit of RM1.6 million or 1.2 sen per share, compared with RM1.98 million or 1.47 sen per share a year earlier.
The acquisition of Perduren came hot on the heels of Law’s purchase of a 17.08% equity stake in steel manufacturer Hiap Teck Venture Bhd for RM88 million in an off-market transaction.
These two acquisitions are rather small, in terms of value, compared with the deal that Law sealed last Christmas eve. Then, his company TS Law Realty Sdn Bhd had bought the East Wing of The Icon @TunRazak en bloc from Mah Sing Group Bhd for RM226.5 million.
Under the deal, TS Law Realty, an investment holding company, will enjoy a guaranteed monthly rental income of RM1.3 million, which works out to RM46.8 million, or 7% yield, for three years.
Originally, the East Wing was sold to Prompt Symphony Sdn Bhd for RM237 million. According to Mah Sing, Prompt Symphony failed to settle the balance of the purchase price after paying a deposit of RM42.67 million and the deal fell through.
Mah Sing had sold the West Wing to Koperasi Permodalan Felda for RM174.4 million in July 2007.
The Icon @TunRazak, located near the intersection of Jalan Tun Razak and Jalan Ampang in Kuala Lumpur, is a purpose-built Grade A office building with more than 500,000 sq ft of lettable space. The certificate for occupation has been issued.
It is said that Law shifted his business focus overseas in the early 2000s and had been absent from the local scene. He made his name in the mining and metal industry and is also noted for his presence in the entertainment industry.
Law was the deputy chairman and shareholder of Australian iron ore miner Midwest Corp Ltd, in which he owned a 12% equity interest.
After a long-drawn shareholders’ battle in the company, he sold his stake to China’s Sinosteel Corp in 2008 and that boosted his wealth substantially.
His acquisition trail is seen to be in line with the government’s call for Malaysians to bring home the wealth they have accumulated abroad.
Law was ranked 36th on Forbes’ list of the 40 richest Malaysians in 2009, with an estimated wealth of US$105 million (RM337 million).
This article appeared in The Edge Financial Daily, April 30, 2010.