KUALA LUMPUR (Aug 27): The Armed Forces Fund Board (LTAT) has received the nod from Bank Negara Malaysia (BNM) for its proposal to privatise its 59.44%-owned outfit Boustead Holdings Bhd, according to sources.
It is learned that BNM has stated it had no objections for LTAT to commence negotiations with Boustead on the proposal, which is expected to cost around RM660 million or 80 sen per share.
Earlier today, Boustead announced that it has received a notice from LTAT, where the fund said it has been granted more time by the Securities Commission Malaysia (SC) to announce its firm intention in relation with the proposed privatisation.
The SC had on July 24 approved LTAT’s application for an extension until Oct 27, the company said.
In a statement this evening, LTAT confirmed that it had received a letter from the central bank stating that it had no objections towards LTAT starting negotiations with Boustead.
“We wish to highlight that notwithstanding the above, the proposal is still subject to other regulatory approval(s) required for the proposal and this notification does not amount to a firm intention that we will undertake the proposal,” it said.
On May 28 this year, LTAT confirmed that it is considering taking Boustead private at an indicative price of 80 sen per share, although it also stated that “there can be no certainty” that it will proceed with the proposal.
The indicative offer price represents 45.2% of Boustead’s net asset of RM1.77 per share as at end-March 2020.
Still, the theoretical offer price is 14.5 sen or 22.14% higher than the counter’s last closing price of 65.5 sen.
Boustead holds equity interest in four publicly listed companies — Affin Bank Bhd, Boustead Plantations Bhd, Boustead Heavy Industries Corp Bhd (BHIC) and Pharmaniaga Bhd, all of which its parent LTAT also holds a stake.
At its last close, Boustead had a market capitalisation of RM1.33 billion.
Edited by Lam Jian Wyn