Offer price for KHSB revised to 83.6 sen per share

by **Cals** Mon 01 Jul 2013, 12:10

Offer price for KHSB revised to 83.6 sen per share
Business & Markets 2013
Written by Afiq Isa of theedgemalaysia.com
Monday, 01 July 2013 09:49

KUALA LUMPUR: Kumpulan Darul Ehsan Bhd's (KDEB) offer price for KUMPULAN PERANGSANG SELANGOR [] Bhd's (KPSB) 56.57% stake in KUMPULAN HARTANAH SELANGOR BHD [] (KHSB) has been revised to 83.6 sen per share from 76 sen following an independent revaluation of the KHSB's land assets.

On April 29, KPSB entered into a share sale agreement with KDEB to sell its equity interest in KHSB totalling 254.56 million shares or 56.57% stake.

In a filing with Bursa Malaysia last Friday, KPSB announced that the consideration for the sale of KHSB shares to KDEB has been revised from RM193.47 million or 76 sen per share to RM212.81 million or 83.6 sen per share.

The revision will see KDEB putting up an additional RM19 million to acquire the KHSB shares.

This confirms a story in The Edge on June 10 that KDEB may raise the offer price for KHSB.

The adjustment was made following an independent revaluation assessment by C H Williams Talhar & Wong Sdn Bhd over material landed PROPERTIES [] owned by KHSB.

The revised market value of all material landed properties was estimated at approximately RM1.09 billion, with a revised net asset value (RNAV) of RM1.47 per KHSB share.

The purchase consideration at 83.6 sen per share represented a 43.13% discount over the RNAV per KHSB share.

On April 28, the day before KHSB received the offer letter, its shares closed at 38 sen. The offer price of 83.6 sen represents a 120% premium to its share value at the time.

Last Friday, KHSB closed at 76 sen.

The rationale for the acquisition is to enable KDEB to have direct control over KHSB's operations, instead of through another public listed company.

KDEB owns 61% of KPSB, which in turn holds a 56.57% stake in KHSB.

Market observers noted that KDEB is getting a bargain as the revaluation exercise indicated that KHSB's material landed assets are worth higher than previously thought.

KDEB, the Selangor government's investment arm, looks set to unlock the value of prime development land held by KHSB as Selangor has some of the priciest real estate in Malaysia.

This article first appeared in The Edge Financial Daily, on July 01, 2013.