Takeover offer for Mahajaya at 85 sen each

KUALA LUMPUR (Feb 10): Property developer Mahajaya Bhd has received a notice of conditional takeover from a group of joint-offerors, made up from its major shareholders, to acquire the remaining 75.56 million shares representing a 27.57% stake they do not own in the company at 85 sen each. The offer valued the whole of Mahajaya at RM232.9 million.

The joint-offerors are Waiban Corp Sdn Bhd (WCSB), Rancangan Impian Sdn Bhd (RISB), and Mahajaya managing director Tan Ming Wai and deputy managing director Tan Ming Ban. Together they own a 72.43% stake in Mahajaya as at on Thursday.

Meanwhile, the persons acting in concert (PAC) with the joint-offerors, mainly the other members of the Tan family, hold total shareholdings of 2.53% in Mahajaya. The PAC had stated their acceptance of the offer.

The takeover offer at a cash price of 85 sen per share represents a 16.4% premium to the stock's closing price of 73 sen on Thursday, and is 9.68% higher than the highest closing market price of Mahajaya's share of 77.5 sen — recorded on Jan 26 — over the past five years. However, the offer came in at 31.5% below the company's net assets per share of RM1.24, as at June 30, 2011.

In a filing with Bursa on Thursday, Mahajaya said the offer price represents a price-to-earnings ratio of 3.39 times the company's net earnings per share for FY11 ended June 30 of 25.08 sen — which included a net gain after tax of about RM63.4 million from the disposal of three portions of land located in Petaling district, Selangor measuring approximately 51.38 acres (20.55ha).

Excluding net gain from the disposal, the offer price represents 43.81 times Mahajaya's FY11 earnings per share of 1.94 sen.

As at June 30, 2011, Mahajaya had cash reserves of about RM41.43 million against total borrowings of about RM4.05 million, translating into a net cash position of RM37.38 million. With 274.014 million outstanding shares, Mahajaya's net cash per share was 13.64 sen as at June 30, 2011.

For 1QFY12 ended Sept 30, 2011, Mahajaya posted a 21.2% decline in net profit to RM1.41 million from RM1.79 million a year ago, while its revenue decreased by 14.6% to RM29.85 million from RM34.96 million a year ago.

For FY11 ended June 30, the company's net profit increased 24-fold to RM68.72 million compared to RM2.86 million in FY10, while revenue increased 108.5% to RM352.89 million from RM169.24 million previously.

Mahajaya attributed the improved performance to a more conducive market and the completion of the disposal of several parcel of lands in Taman Damai Utama in Puchong.

Mahajaya's on-going development projects include Bandar Damai Perdana in Cheras.

The company will pay a first and final net dividend of one sen per share for FY11 which will go ex on Feb 24.

Mahajaya's market capitalisation was RM200 million based on on Thursday's close. Its shares traded between a 52-week high of 79 sen in January 2012 and a low of 50 sen on Dec 22, 2011.

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