Dayang tightens grip on Perdana Petroleum

by **Cals** Sat 16 May 2015, 02:37

Dayang tightens grip on Perdana Petroleum

KUALA LUMPUR: Dayang Enterprise Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) is raising its stake in its associate company Perdana Petroleum Bhd (PPB) ([You must be registered and logged in to see this image.] Financial Dashboard).
Dayang announced to Bursa Malaysia that it had entered into a conditional share sale agreement (SSA) with Affin Hwang Asset Management Bhd to acquire the latter’s 5.74% stake or 42.96 million shares in Perdana, at RM1.55 per share or RM66.59 million in total.
The share purchase will subsequently be followed by a mandatory general offer (MGO).
The shares bought from Affin Hwang would raise Dayang’s shareholding to 35.51% in Perdana; and hence will be obliged to extend an MGO.
“Upon the SSA becoming unconditional, Dayang will serve the notice of the proposed MGO to the board of directors of Perdana, in accordance with Section 11(8) of the Code,” said Dayang.
The MGO entails Dayang to acquire all remaining Perdana shares that it does not already own at RM1.55 per share, and the remaining warrants it does not already own for 84 sen per unit.
“It is the intention of Dayang to maintain the listing status of PPB, subsequent to the proposed MGO,” said Dayang in its filing with Bursa yesterday.
According to the salient terms of the SSA, the obligations of the parties that are set out in the SSA are conditional upon approval of Dayang’s shareholders at an extraordinary general meeting to be held three months from the SSA or at a date mutually agreed on.
Should the conditions of the agreement come in not fulfilled, the parties are entitled to terminate the agreement by giving a notice of termination.
The purchase price of RM66.59 million or RM1.55 per Perdana share was arrived at on a willing buyer-willing seller basis, after considering historical and prevailing market prices, audited net assets, and audited net profits for Perdana as a group, said Dayang.
The purchase consideration also represents a premium of 6.16%, 10.71% and 24% to the five-day, one month and three-month volume weighted average market price of Perdana shares up to May 13, 2015 of RM1.46, RM1.40 and RM1.25 respectively.
Apart from that, the purchase price also took into account the price-to-book ratio of 1.74 times based on the audited net assets of Perdana as at Dec 31, 2014, and price-earnings ratio of 12.97 times based on the audited net profits of the group.
According to the announcement, the proposed acquisition represents an opportunity for Dayang and its subsidiaries to pursue its expansion strategy and long-term objectives of evolving into a market leader for the provision of hook-up, construction and commissioning (HUCC) services within the oil and gas industry.
“Perdana is a strategic fit to Dayang’s HUCC business and the successful completion of the proposed MGO may result in the combined entity becoming one of the largest integrated HUCC players in the market,” said Dayang.
Meanwhile, Dayang said the proposed MGO provides an opportunity for Dayang to further increase its shareholding in Perdana, after the acquisition of Affin’s stake, which will result in Perdana becoming a subsidiary of Dayang in the event the proposed MGO is successful.
It said for the past two financial years ended Dec 31, 2014, Perdana as a group recorded strong financial performance with its offshore supply vessels, mostly under long-term charters.
“With a strong track record, Dayang is confident that the Perdana group will continue to be a growth driver for the Dayang group, going forward.
“The proposals may also further enhance the collaboration between the Dayang group and the Perdana group to take advantage of operational and cost synergistic benefits that may arise from such a collaboration, as well as combined expertise which will give rise to enhanced competitive advantage,” it said.
Maybank Investment Bank Bhd has been appointed principle adviser to Dayang for the proposals.

This article first appeared in The Edge Financial Daily, on May 15, 2015.