Vincent Tan paring stake in BJCORP 3395 BERJAYA CORPORATION BERHAD to pave way for 'potential major acquisition in financial services segment'

Vincent Tan paring stake in  BJCORP 3395 BERJAYA CORPORATION BERHAD to pave way for 'potential major acquisition in financial services segment'

KUALA LUMPUR (Dec 27): Berjaya Corp Bhd (BCorp) disclosed that its management is in the midst of evaluating a potential major acquisition involving a licensed entity governed by Bank Negara Malaysia under the Financial Services Act 2013 (FSA).

In line with this potential transaction, BCorp’s major shareholder and non-executive chairman Tan Sri Vincent Tan Chee Yioun has committed to paring down his shareholding to below 19.6% in the group by the end of January 2023, to abide by the law, which provides that no individual shall hold more than 10% stake in a licensed person under the FSA.

BCorp said Tan’s stake reduction is “to facilitate the potential acquisition of a 51% equity stake in the licensed entity”, without disclosing the name of the acquisition target.

“In view of this, [Tan] has been carrying out several share disposals to reduce his stake in BCorp to not more than 19.6%, which will result in his effective interest in shares of the licensed entity to be not more than 10% if the potential acquisition materialises,” the group said in a Bursa Malaysia filing on Tuesday (Dec 27).

“The board of BCorp proposes to expand and grow its financial services segment and expects the contribution from this potential acquisition to contribute significantly to the earnings and net assets of BCorp group,” it added.

BCorp said Tan owns 12.95% direct interest and 13.29% indirect interest in the group as at Dec 23, after disposing of 400 million shares via direct business transaction on Dec 22.

Kossan Rubber Industries Bhd’s founder and managing director Tan Sri Lim Kuang Sia emerged as a substantial shareholder in BCorp after acquiring 400 million shares or a 7.16% stake, of which 120 million shares or 2.15% are direct interest and 280 million shares or 5.01% were acquired through Kossan Holdings (M) Sdn Bhd.

Lim owns 0.3% direct interest and 48.75% indirect interest in Kossan Rubber.

There is a “grandfathering rule” within the financial services sector which refers to an exemption given to certain individuals who own more than 10% stake in a financial institution prior to the FSA.

The rule has recently been widely discussed following the passing of Public Bank Bhd’s founder Tan Sri Teh Hong Piow, who owned a 23.41% stake in Public Bank through 0.64% direct shareholdings and 22.77% indirect ownerships.

Apart from Public Bank, the other two local banks whose shareholders have yet to reduce their individual shareholdings to meet the FSA threshold are Hong Leong Bank Bhd and AMMB Holdings Bhd.

Hong Leong Bank’s chairman Tan Sri Quek Leng Chan owns over 64% stake via Hong Leong Financial Group Bhd. Australia and New Zealand Banking Group Ltd owns 21.64% shareholdings in AMMB, while Tan Sri Azman Hashim has an 11.81% stake in the banking group.

Shares of BCorp closed one sen or 3.5% higher at 29.5 sen on Tuesday, giving it a market capitalisation of RM1.76 billion.

Kossan closed two sen or 1.8% higher at RM1.15, valuing it at RM2.94 billion.

Public Bank declined 14 sen or 3.15% to RM4.30, with a market capitalisation of RM83.46 billion, while Hong Leong Bank fell 10 sen or 0.5% to RM20.46, valuing the banking group at RM44.35 billion.

AMMB settled 10 sen or 2.4% lower at RM4.14, giving it a market capitalisation of RM13.72 billion.

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