GuocoLand Limited is moving to privatise Bursa-listed GuocoLand (Malaysia) Berhad by way of a selective capital reduction and repayment exercise for some RM269.4 million ($86.9 million).
As at Jan 19, GuocoLand Limited’s wholly owned subsidiary GLL (Malaysia) owns approximately 65.03% of the total GuocoLand (Malaysia) shares issued, and “persons acting in concert” with GuocoLand Limited collectively hold some 67.93%.
Under the proposed privatisation, announced Feb 3, GuocoLand (Malaysia) shareholders will receive RM1.10 per share, about 17% above its last traded price on Jan 30.
The offer price represents a 47.73% premium to its six-month volume-weighted average market price of RM0.7446.
Upon cancellation of the GuocoLand (Malaysia) shares, GLL (Malaysia) will become the sole shareholder of GuocoLand (Malaysia), resulting in it becoming a wholly owned subsidiary of GLL (Malaysia) and an indirect wholly owned subsidiary of GuocoLand Limited.
After completion of the proposed privatisation, GuocoLand (Malaysia) will be delisted from Bursa Securities.
See also: Spindex Industries fixes court hearing on Jan 8, targets delisting by Feb 13
Quek Leng Chan and Kwek Leng Hai, who are directors of GuocoLand Limited, have interests in GuocoLand (Malaysia) shares. They have abstained from voting on matters relating to the proposed privatisation in board decisions of GuocoLand Limited.
The proposed privatisation will be funded through the use of any excess funds in GuocoLand (Malaysia). The balance will be financed by advances and/or equity injection from GLL (Malaysia) and/or GuocoLand Limited.
The proposed privatisation is not expected to have any material effect on the consolidated net tangible assets or earnings per share of the group for the financial year ending June 30.
See also: Privatisation of Mandarin Oriental gets green light from independent shareholders
Shares in Singapore-listed GuocoLand Limited were halted after the market closed on Feb 2. The stock rose 23% between Jan 1 and Feb 2.
Shares in Bursa-listed GuocoLand (Malaysia) rose 56% between Jan 1 and Jan 30.
The GuocoLand (Malaysia) board has until March 2 to consider and determine whether it is agreeable to the offer.
GuocoLand Limited is listed on the Mainboard of the Singapore Exchange. The parent company of GuocoLand Limited is Guoco Group Limited, a company listed on the Main Board of the Stock Exchange of Hong Kong.
Both GuocoLand Limited and Guoco Group Limited are members of Hong Leong Group in Malaysia.
Chart: GuocoLand
