Censof fends off 10 to win bid for 45% stake in TEB

Censof fends off 10 to win bid for 45% stake in TEB
Business & Markets 2013
Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com
Friday, 13 September 2013 09:47

KUALA LUMPUR: Censof Holdings Bhd fended off a challenge from 10 others to win a competitive bid to purchase a 45.03% stake in TIME ENGINEERING BHD [] (TEB).

According to an announcement yesterday, Censof will pay Khazanah Nasional Bhd RM69.9 million or 20 sen per share for the interest in TEB.

Upon completion of the transaction, Censof will emerge as the new controlling shareholder in TEB in which it will be obliged to extend a mandatory general offer (MGO) to the shareholders of TEB at an offer price of 20 sen per share.

The MGO price is lower than TEB’s closing price of 28 sen
yesterday.

Tan Sri Azman Mokhtar, Khazanah managing director, said Censof was selected out 10 interested parties based on the merit of its overall bid and a defined strategy in line with Khazanah’s divestment objectives for TEB.

“We believe that Censof brings with it the strong entrepreneurship and business acumen as well as management capabilities, leadership as well as the technical and financial capabilities that can take TEB to the next level of performance,” said Azman in a statement.

Censof group managing director Datuk Samsul Husin said, “We were happy to be selected by Khazanah from among our peers in recognition of our strong entrepreneurship, track record in the industry and capabilities. As such, we are confident that we will be able to deliver value to TEB shareholders.”

Censof is an information TECHNOLOGY [] (IT) solutions provider while TEB is an IT firm that provides solutions for e-commerce and cyber security.

“This acquisition will not change the principal activities and focus of Censof and TEB. This acquisition will only enhance Censof and TEB’s customer base and strengthen Censof and TEB’s value proposition as both are involved in similar ICT solution business,” added Samsul.

Samsul said there are many areas where “we see the synergistic benefits of acquiring TEB, mainly in the form of leveraging on each other’s strength to bundle our products and services into a more comprehensive product offering”.

According to Khazanah, the divestment of TEB involves a three-stage tender process: a pre-qualification stage, indicative bid stage and binding stage.

The tender facilitated a transparent process through which a group of bidders were selected to proceed to each of the following stages based on a set of criteria which included price, business plan and strategy for TEB, financial track record and availability of funds as well as experience in the sector.

Additionally, the divestment price was determined based on the fundamentals of TEB, reflecting the remaining concession period with the Royal Malaysian Customs Department up to September 2014 by TEB’s majority-owned subsidiary and main asset Dagang Net Technologies Sdn Bhd (DNT) and the other two TEB subsidiaries which are operating at a loss.

According to Khazanah’s statement, DNT has submitted a tender proposal for the new uCustoms system.

The divestment of TEB is in line with Khazanah’s overall strategy of disposing of non-core assets in a gradual and orderly manner to fulfil the role of government-linked investment companies and government-linked companies under the New Economic Model.

TEB is one of the five non-core assets identified by Khazanah for divestment under the Unit Peneraju Agenda Bumiputera initiative and the fourth company to be divested under this initiative.

The divestment of STLR Sdn Bhd, another of the identified non-core assets, was successfully completed by Khazanah earlier this year.



This article first appeared in The Edge Financial Daily, on September 13, 2013.