Hot Stock Al-Hadharah Boustead on market radar after proposed privatisation

Hot Stock Al-Hadharah Boustead on market radar after proposed privatisation
Business & Markets 2013
Written by Jason Tan of theedgemalaysia.com
Monday, 22 July 2013 16:08

KUALA LUMPUR (July 22): PLANTATION []-based AL-HADHARAH BOUSTEAD REIT [] was one of the actively-traded stocks this afternoon with 11.81 million shares done as of 3:19pm.

The stock was unchanged at RM2.01 after rising earlier to its intraday high of RM2.02. The company said last week its major shareholder planned to privatise the REIT.

BOUSTEAD HOLDINGS BHD [] said it planned to privatise Al-Hadharah Boustead via a selective unit redemption and repayment (SUR) exercise.

Under the SUR, holders of Al-Hadharah Boustead units will receive a cash repayment and special dividend amounting to RM2.10 per unit.

Minority Shareholder Watchdog Group (MSWG) said in a note that the group deems the privatisation as “an interesting development” because it is the first privatisation of a REIT in Malaysia.

However, MSWG questions the validity of one of the reasons for the proposal.

The MSWG has taken note of the 90% earnings distribution policy in Al-Hadharah Boustead which has restricted the REIT from engaging in growth strategies like acquisitions of mature plantation assets or replantation.

MSWG said : “Does it mean that this point had not been considered earlier and any new REITs in the plantation sector would have to consider this?”