Hot Stock MBF hits 9-yr high amid demands for higher takeover offer

Hot Stock MBF hits 9-yr high amid demands for higher takeover offer
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Thursday, 14 March 2013 10:59


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KUALA LUMPUR (Mar 14): MBf HOLDINGS BHD [] (MBFH) soared as much as 17% to its highest in over nine years amid minority shareholders' unhappiness over the takeover offer by the diversified company's controlling shareholder, dealers said.

At 10.47 am, MBFH shares were traded at RM1.75 with some 955,000 shares done, placing the stock among ten top gainers. The stock had earlier risen as much as 26 sen to RM1.78 -- its highest since June 2003, Bloomberg data show.

A dealer said the gains in MBFH shares were due to investors are asking for a higher offer from Tan Sri Dr Ninian Mogan Lourdenadin, who is offering RM1.50 a share to take over the firm.

"The public will reject the offer as they are not happy. Minority shareholders are hoping that the acquirer will offer a higher price," the dealer told theedgemalaysia.com.

The edgemalaysia.com yesterday received calls from some shareholders saying they were even prepared to go to court on this.

Ninian had owned 87% of MBFH when he offered to buy the remaining shares of the firm at RM1.50 each on February 6 this year.

He also offered to acquire its remaining warrants at 50 sen each and outstanding redeemable convertible secured loan stocks issued by MBFH’s wholly-owned subsidiary Wellink Invesments Ltd at RM4.64 each.

For the exercise to succeed, the acquirer will have to secure an acceptance level of more than 90% of the remaining 13% stake he plans to acquire. This means Ninian's stake in MBFH will have to go up to 98.7% for the takeover to go through.

However, that has not happened so far. Exchange filings show that his latest reported equity portion had only touched 92.77%. As such, the deadline for the offer has been extended to April 3 from original date on March 20.

Minority shareholders are unhappy with the offer as they feel the price does not reflect the true value of the firm. The offer price of RM1.50 per MBFH share is a 37% discount to the company's latest reported book value per share of RM2.37.

MBFH’s website indicates that the firm was initially set up as a private limited entity on October 10 1963 before it was converted to a public limited company on October 21 that year under the name Island Hotels & PROPERTIES [] (M) Ltd.

The firm had, subsequently, changed its name to Island Hotel & Properties (M) Bhd and Pacific Development Credit Bhd on April 15 1966 and May 26 1976 respectively before adopting its current name on July 20 1981.

MBFH’s businesses include real estate, financial services, and education. The firm also operates tea, coffee, cocoa PLANTATION []s.