KUALA LUMPUR (April 11): LBS Bina Bhd is acquiring 17 million shares or an 18.97% stake in former Practice Note 17 company ML Global Bhd from its substantial shareholder and managing director Datuk Beh Hang Kong for RM9.5 million or 56 sen per share.
This raises LBS Bina's stake in ML Global from 31.95% to 50.92%, making it a subsidiary company and also triggering a mandatory takeover (MTO) offer for the remaining shares.
In a filing with Bursa Malaysia, LBS Bina said it is offering to buy the remaining shares at 56 sen a share.
It is also offering to buy remaining ML Global warrants at six sen each. The warrant carries the right to subscribe for new share, on a one-for-one basis, at 50 sen each during a five-year period that ends on Oct 27, 2019.
LBS Bina said the share acquisition represents an investment in ML Global's businesses that is complementary to its property development and construction businesses.
It said the purchase consideration was arrived at on a willing buyer-willing seller basis after taking into consideration the prevailing market prices of ML Global shares immediately prior to the date of the acquisition.
"(It was) namely at a discount of 9.7% to the five-day volume-weighted average market price of ML Global shares up to and including April 8, 2016, being the last full trading day prior to the date of the share acquisition of 62 sen per ML Global share," LBS Bina said.
LBS Bina said the share acquisition was fully funded via bank borrowings, while the MTO will be funded via internally-generated funds and/or bank borrowings.
The company said it intends to maintain the listing status of ML Global on the Main Market of Bursa Securities.
As at April 8, ML Global's authorised share capital was RM500 million comprising one billion shares, of which 89.6 million have been issued and fully paid up.
The principal activities of ML Global are investment holding and provision of management services to its subsidiaries that are involved in construction activities, manufacturing and trading of roof tiles.
The group, which had its PN17 status lifted on March 11 following its regularisation plan involving LBS Bina's share acquisition, has six ongoing construction projects with a total contract value of RM47.8 million.
"The total contract value for the major recent construction projects completed by ML Global in the financial year ending Dec 31, 2015 (FY15) and up to the LPD amounts to approximately RM9.8 million.
"Based on its audited consolidated financial statements for FY15, its profit after taxation and net assets are approximately RM10.2 million and RM30.3 million, respectively," LBS Bina said.
Moving ahead, LBS Bina envisages that ML Global's roof tiles manufacturing business will face a challenging and competitive outlook in view of the weak market demand for roof tiles.
On the other hand, the board expects the construction division to continue being the driving force behind the revenue and profit for the group in 2016.
"LBS Bina's core competency, experience and track record in the property development and construction sector is expected to further enhance the ML Global's construction business," the company said.
LBS Bina shares last changed hands at RM1.60, for a market capitalisation of RM882.59 million, before trading in the counter was halted at 4.03pm to allow for the share acquisition announcement. Trading will resume tomorrow morning.
ML Global, which also halted trading, was down 1.5 sen or 2.46% to 59.5 sen for a market capitalisation of RM54.22 million.
LBS (5789) - LBS Bina ups stake in ML Global to 50.92%, triggering MTO
http://www.theedgemarkets.com/my/article/lbs-bina-ups-stake-ml-global-5092-triggering-mto
