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Foreign fund acquires 5% stake in Dijaya Corp

KUALA LUMPUR: Tan Sri Danny Tan's Dijaya Corp Bhd on Monday, July 4 jumped 7%, just ahead of the entry of TAEL One Partners Ltd as a substantial shareholder with just under 5% equity interest.

In a filing with Bursa Malaysia on Monday, Dijaya said the Cayman Islands registered company bought 22.75 million shares or a 4.99% stake for RM37.53 million on Monday. The RM1.65 per share paid was at a 1.8% discount to the RM1.68 apiece the stock closed at on Monday. The shares were crossed off market in two direct deals just after the closing bell on Monday, stock market data showed.

TAEL One was acting in its capacity as general partner of The Asian Entrepreneur Legacy One LP, Dijaya said.

According to its website, TAEL Partners was set up in 2007 and specialises in originating and offering capital funding transactions to Asian businesses, particularly those based in Southeast Asia. The Asian Entreprenuer Legacy One fund was launched on Sept 3, 2007 and has a fund size of US$551 million (RM1.65 billion). The fund, which invests in a broad range of sectors — including oil and gas services, commodities, infrastructure, utilities, real estate and specialised manufacturing — claims to have not suffered any impairment to its investment since its inception in 2007, according to data on its website.

Dijaya's stock hit a 10-year high of RM1.71 intra-day on Monday, up as much as 14 sen or 8.9% from last Friday's close. It closed 11 sen or 7% higher at RM1.68 on Monday on a volume of 1.22 million shares. At on Monday's close of RM1.68, Dijaya is trading at a 12.2 times historical price-to-book multiple and 0.83 times its net assets per share of RM2.02 as at March 31, 2011.

The stock, which is up 63.11% year-to-date, has surged nearly 50% in the past month alone, spurred by the the purchase of 36ha of land in Subang. That triggered fresh investor interest in the stock, which is widely viewed by analysts as deeply undervalued. At the time of writing, the stock had no active analyst coverage, according to Bloomberg data.

In a recent interview with The Edge weekly, Tan — the man behind Petaling Jaya's Tropicana Golf and Country Resort development and younger brother of Berjaya Group chairman Tan Sri Vincent Tan — said Dijaya hopes to start developing that piece of land in Subang early next year.

The younger Tan's dream is to build Dijaya into a company with a market capitalisation of RM2 billion to RM3 billion, at least 2.6 times more than its current market capitalisation of RM764.4 million.

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