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Syed Mokhtar and investors to privatise UMLand

KUALA LUMPUR (July 13): Businessman Tan Sri Syed Mokhtar Al-Bukhary and a group of investors are buying out United Malayan Land Bhd (UMLand) to take the property developer private at RM2.50 per share. The tycoon’s acquisition trail is gaining momentum.

This is is the second public-listed entity that Syed Mokhtar wants to privatise this week. Just two days ago MMC Corp Bhd, which is also controlled by Syed Mokhtar, offered to privatise Aliran Ihsan Resources Bhd, a water treatment concessionaire in the southern region of Peninsular Malaysia.

In a statement on Thursday, UMLand said newly incorporated Seleksi Juang Sdn Bhd (SJSB), in which Syed Mokhtar holds a 50% equity stake, is off ering RM2.50 per share to buy out UMLand minority shareholders.

A substantial shareholder of UMLand, Datuk Ng Eng Tee, a Singaporean, holds the remaining 50% of SJSB. Ng owns 35.76% equity stake in UMLand while Syed Mokhtar holds 28.1%. The off er price of RM2.50 is 5.9% above yesterday’s closing price of RM2.36. However, the stock has been up some 52% the past three months.

The offer price, which values UMLand at RM755 million, is also 28.2% above the stock’s threemonThisvolume-weighted average price of RM1.95. The buyout off er came after SJSB paid RM156.45 million or RM2.50 per share for 20.75% in UMLand off -market yesterday.

Temasek Holdings Pte Ltd is likely the seller of the 20.75% block or 62.58 million shares, as the Singapore sovereign fund held a stake of similar size as at July 10. This could not be confirmed at press time. The share purchase raised the shareholdings of SJSB and its parties acting in concert in UMLand to 53.83%.

Following the transaction, Wawasan Perangsang Mewah Sdn Bhd, which has a 23.65% stake in UMLand, gave a declaration to co-operate with SJSB to gain control of UMLand. With the declaration, the offerer and parties aligned to it already control 77.52% of UMLand, which they intend to delist.

The cash outlay for the buyout offer is only RM2.45 apiece for the offeror as minority shareholders accepting the RM2.50 offer would not be entitled to the five sen per share final dividend that will trade ex-entitlement on Sept 5.

The offer price will be adjusted for the dividend payment, the statement said. Buying out minorities holding 22.48% of UMLand at RM2.45 works out to only RM68 million cash.

The buyout is already deemed unconditional as the offeror already owns more than 50% of UMLand.

This article appeared in The Edge Financial Daily on July 13, 2012

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