KUALA LUMPUR, Dec 18 (Bernama) -- Bursa Malaysia ended today’s trading session on a firmer note, reversing earlier losses as gains in the benchmark index were driven by industrial and consumer stocks. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 5.46 points, or 0.33 per cent, to 1,646.90, from Wednesday’s close of 1,641.44. The index opened 1.21 points lower at 1,640.23, and moved between 1,636.61 and 1,647.80 throughout the trading session. The broader market was positive with gainers beating decliners 590 versus 477. A further 527 counters were unchanged, 1,182 untraded and 12 suspended. Turnover inched up to 2.47 billion units worth RM2.29 billion from 2.45 billion units worth RM2.27 billion on Wednesday.
Pentamaster Corp Bhd has announced plans to privatise its 63.9%-owned Hong Kong-listed Pentamaster International Ltd (PIL) in collaboration with Puga Holdings Ltd, raising Pentamaster’s stake to 71%. The announcement confirms The Edge Malaysia’s Dec 9 report, which speculated on this move.
Key Details of the Privatisation Exercise
Acquisition Breakdown
- Pentamaster and Puga Holdings Ltd will acquire additional stakes of 7.1% and 29%, respectively, in PIL at HK$0.93 per share (RM0.54).
- The offer represents a 16.25% premium over PIL’s last traded price of HK$0.80 (RM0.46) before its trading suspension on Dec 4.
Special Dividend and Share Cancellation
- PIL will issue a special dividend of HK$0.07 per share (RM0.04), amounting to HK$168 million, to its shareholders.
- Minority shareholders will receive a total of HK$1 per share upon exiting, following the cancellation of shares not held by Pentamaster.
Valuation and Funding
- The acquisition values PIL at HK$2.23 billion (RM1.29 billion), equivalent to a trailing price-to-earnings ratio (PER) of 10.8 times based on its 2.4 billion outstanding shares.
- Pentamaster plans to fund the acquisition using internal resources, with RM466.73 million cash on hand and no borrowings as of September 2024.
Rationale for the Deal
Pentamaster highlighted that the deal provides PIL's minority shareholders with an opportunity to:
- Monetise investments at a significant premium.
- Exit amid consistently low trading volumes of PIL shares.
Financial Impact
- PIL remains the main earnings contributor for Pentamaster.
- For 9MFY2024, PIL reported a net profit of RM88.8 million, down 18% year-on-year.
- Pentamaster’s net profit for the same period declined 25.4% to RM51.05 million.
Shareholder Breakdown
- Major shareholders of PIL include:
- Fidelity International (5.06%)
- Employees (4.53%)
- Public float (25.04%)
- Co-founder and executive chairman Chuah Choon Bin (1.11% in PIL, 19.7% in Pentamaster).
Market Reaction
- Pentamaster’s shares rose 2.18% to RM4.21 on Thursday, reaching a three-month high, with a market capitalisation of RM3 billion.
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