KUALA LUMPUR (July 29): Trading in KAF-Seagroatt & Campbell Bhd's shares will be halted tomorrow (July 30) ahead of a corporate announcement, and talk is that the financial services group is being taken private as the reason.

"The acquisition is likely to be undertaken by a vehicle linked to the major shareholders of the group," a source told theedgemarkets.com. 

KAF-Seagroatt & Campbell director Datuk Khatijah Ahmad is currently the largest shareholder in the group, with a 73.33% stake.

It isn't clear how much the acquirer would pay to buy the rest of the group. However, its shares are currently trading at RM2.08, above their net asset value per share of RM2.0366 as at Feb 28, 2015.

KAF-Seagroatt & Campbell requested today for the suspension in the trading of its securities tomorrow, pending a material announcement.

In a filing with Bursa Malaysia, KAF-Seagroatt & Campbell (fundamental: 1.45; valuation: 2) said it has today received a letter from KAF Investment Bank Bhd, stating it will be entering into a material corporate transaction involving KAF-Seagrott & Campbell.

KAF Group operates its business through four main subsidiaries — KAF Investment Bank, KAF Seagroatt & Campbell, KAF Fund Management Sdn Bhd and KAF Trustee Bhd.

The last time takeover speculation was doing the rounds was in December 2011, when The Edge Weekly reported that a Singapore bank was keen on acquiring KAF-Seagroatt & Campbell’s securities business. Bloomberg had then reported that Singapore-based OCBC was eyeing to buy a 49% stake in the brokerage business, at a price equivalent to 1.3 to 1.4 times book value.

For the nine months period ended Feb 28, 2015 (9MFY15), the group saw its net profit plunge 63.3% to RM4.99 million, from RM13.59 million a year ago, mainly due to lower brokerage and management fees income generated by the stockbroking and asset management segments, respectively. Revenue for 9MFY15 also fell 19.3% to RM30.73 million, from RM38.09 million in 9MFY14.

The counter was highlighted as a stock with negative momentum by The Edge Research today.

KAF-Seagroatt & Campbell’s share price has been on an uptrend since last week, gaining 28 sen or 16% from its closing of RM1.80 on July 22.

Today, it gained 23 sen or 12% to close at RM2.08, giving it a market capitalisation of RM222 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)