Recent M&G deals involving listed companies

Malaysian Business, Jul 1, 2006

MNI Holdings Bhd (MNI)

Malayan Banking Bhd (Maybank) - together with its insurance joint- venture entity with Fortis called Mayban Fortis Holdings Bhd - took MNI private with a cash consideration of RM4.02 per share. This sum was approximately 1.0x MNI's consolidated audited NTA per share as at March 31, 2005.

The offer price represented a premium of RM1.01 or 33.6% of the weighted average price of MNI shares for the five days to Aug 25, 2005 of RM3.01.

It was reported that the rationale behind the acquisition and taking private of MNI was to provide a quantum leap for Mayban Fortis' business and further enhance Maybank Group's insurance contribution. It represents a major push for Maybank towards realising its ambition to be market leader in the insurance and takaful business.

CIMB Bhd

CIMB was acquired by the BCB group of companies from Bumiputra- Commerce Holdings Bhd (BCHB) in 2005 to form a new CIMB Banking Group. The listed company was then delisted from Bursa Malaysia and taken private. The new enlarged private CIMB Banking Group is to be functionally recognised and managed as a `universal bank'.

The shareholders of CIMB were given a choice of either accepting (i) RM5.50 cash per share or (ii) subscribing to BCHB shares at RM4.80 per share (a ratio of one CIMB share to 1.16 BCHB shares). The rationale behind the acquisition and restructuring exercise of the group (BCHB and CIMB) was stated as to counter rising competition in the industry, especially from the foreign-based banks.

Southern Bank Bhd (SBB)

The merger talk between BCHB and SBB commenced in October last year. The news was not surprising as BCHB had previously expressed interest in acquiring a retail-based bank to complement its existing business following its corporate restructuring exercise involving CIMB and BCB.

The merger was finally consummated after initial bickering, with BCHB offering SBB shareholders a takeover offer of either RM4.30 in cash for each SBB share (inclusive of a 5 sen dividend from SBB) or RM3.26 in cash plus one redeemable convertible unsecured loan stock (RCULS) with a nominal value of RM1.04.

AmCorp Group Bhd

Under its proposed privatisation exercise, Tan Sri Azman Hashim and his investment holding companies will acquire all the ordinary shares in AmCorp Group (other than treasury shares) that are not yet held by them. The offer price of RM1.40 per share represents 0.99x the NTA per share for a total consideration of RM917.3 million.

It is believed the vendor will arrange a bank loan to finance the deal. As for the time frame for completion, it is estimated the takeover and privatisation exercise will be completed by 3Q2006.

The whole exercise is apparently part of a strategy to pare down Azman's stake in the financial entities. To recap, Azman and AmCorp were given a deadline until mid-2007 to reduce their stakes in AMMB Holdings Bhd and AmInvestment Group Bhd (AIGB) following the internal restructuring of the whole AMMB Group and subsequent listing of AIGB. At present, the direct and indirect stakes of Azman in AMMB and AIGB are believed to be 12.1% and 19.4% respectively.

It is believed AmCorp will act as a special-purpose vehicle (SPV) in consolidating the shareholdings of Azman and this will be followed by a series of asset rationalisation exercises before the stakes are further reduced.

Koa Denko (M) Bhd (KOA)

Koa Denko (S) Pte Ltd (KDS), the current major shareholder of KOA, has announced plans to acquire the remaining 27.4 million shares in KOA not yet held by it, representing approximately 61.01% of the issued and paid- up capital of KOA, and also all the new shares of KOA arising from its employee share option scheme (ESOS), at a cash consideration of RM2 per share.

The offer price represents a 150% premium over the closing price of KOA of RM0.80 on Jan 13, 2006 or 24% above its FY05 NTA per share of RM1.24.

Guocoland (M) Bhd (GLM)

GLL (M) Pte Ltd (GLLM), which holds a 46.74% stake in GLM, and parties acting in concert with it, have made an offer to acquire the remaining shares of GLM that are not owned by them, representing 53.26% of GLM's issued and paid-up capital (of RM0.50 each) for a cash consideration of RM0.78 per share.

The offer price is about 10% above the pre-announcement closing price of RM0.71 or at a 33.6% discount to the 3QFY06 NTA per share of RM1.07.

Lingui Development Bhd

Samling Global Ltd, the 39.87% owner of Lingui and persons acting in concert with it have made an offer of RM1.01 cash per share for the remaining ordinary shares of RM0.50 each in Lingui. The offer price is about 2.5% above the closing share price of RM0.985 on April 18, 2006 and at a 52.1% discount to the NTA per share of RM1.94 as at end-December 2005.

It was reported that the rationale behind such a proposal was to allow Samling Group to go public on the Hong Kong Stock Exchange where the valuation premium could be higher for timber stocks. However, it is believed the company will only be taken private if and when the acceptance of the offer is above 90%.