MyEG close to triggering MGO

by **Cals** Thu 06 Mar 2014, 17:23

Business & Markets 2014

Written by Levina Lim of theedgemalaysia.com

Thursday, 06 March 2014 10:09

KUALA LUMPUR: MyEG Services Bhd’s major shareholders would have increased their stakes in the e-government service provider to a level close to triggering a mandatory general offer (MGO), had it not been for the 10.81 million treasury shares retained in its books from a recent share buyback.

A filing with Bursa Malaysia showed that on Monday, MyEG managing director Wong Thean Soon and executive director Datuk Raja Munir Shah Raja Mustapha, via Asia Internet Holdings Sdn Bhd (AIHSB), acquired 8.5 million shares, representing 1.44% of the company, for RM24.23 million or RM2.85 apiece.

The transaction, a block of shares in married off-market deal, increased AIHSB’s stake in MyEG from 31.2% to 32.66%, close to triggering an MGO to buy the remaining shares in the company.

Wong and Munir, who have deemed interest in MyEG, saw their indirect interest jump from 32.1% to 33.57%.

“The percentage of direct and indirect interest excludes the 10.81 million ordinary shares of 10 sen each bought back by the company and retained as treasury shares,” said MyEG.

According to regulatory requirements, an MGO will be triggered when the 33% shareholding threshold is breached. Hence, an acquisition of an additional stake of 0.34% by AIHSB would see Wong and Munir propose a general offer.

MyEG recently saw a surge in its share price following news that it had secured a RM180 million contract from the Royal Malaysian Customs Department to undertake the Customs online tax reporting or electronic monitoring system in anticipation of the implementation of the goods and services tax. The project is expected to result in a handsome windfall for the company.

MyEG shares closed up 1.76% at RM2.89 yesterday, giving the company a market capitalisation of RM1.68 million.

MyEG’s net profit rose 38% to RM11.21 million for the second quarter ended Dec 31, 2013 (2QFY14) from RM8.11 million a year earlier. Revenue increased 22.26% to RM23.46 million from RM19.19 million previously.

This article first appeared in The Edge Financial Daily, on March 06, 2014.