KUALA LUMPUR (Sept 29): All eyes will be on MMC Corp Bhd’s extraordinary general meeting (EGM) on Thursday (Sept 30), where shareholders will decide on the offer by its biggest shareholder Tan Sri Syed Mokhtar Albukhary to take the company private via a selective capital reduction (SCR) at RM2 per share.
MMC share price has rebounded 20 sen or 12.12% in the past three days to close at RM1.85 on Wednesday. The closing price is still at a 7.5% discount to the RM2 offer price. Compared to its last traded price of RM1.30 before the privatisation announcement on June 3, the counter has gained 42.31%. Its shares are up 107.87% year-to-date.
On June 3, Syed Mokhtar, via his private vehicle Seaport Terminal (Johore) Sdn Bhd (STJSB) which owns a controlling 51.76% stake in MMC, announced that it would be conducting the exercise for the remaining 48.24% stake it does not own in the company. This would see the tycoon forking out RM2.94 billion.
With outstanding shares of 3.05 billion, MMC is worth RM5.6 billion based on Wednesday’s closing price of RM1.85.
According to STJSB, the SCR was being done to allow greater flexibility to MMC in managing and developing its existing business, while exploring opportunities without regulatory restrictions and compliance costs associated with its listing status.
The Edge on Monday (Sept 27) reported that the key decision-making party in the privatisation of MMC is Permodalan Nasional Bhd (PNB), which holds a 20.97% stake in the company. This is because, under the SCR, at least 75% of the shareholders who are present and voting must vote for the deal, with not more than 10% dissenting.
“Historically, PNB has not resisted the injection of assets by Syed Mokthar into MMC,” said the report.
The report noted that other than PNB, the other shares were mostly held by funds. The Employees Provident Fund had the biggest amount of shares apart from PNB, at 1.77%.
Early this month, its independent adviser Alliance Investment Bank Bhd had deemed the proposed SCR as "not fair", as the offer price of RM2 per share is lower than the estimated value of between RM3.32 and RM3.41.
However, the adviser is of view that the proposal is "reasonable" on grounds that MMC shares had not traded above the offer price for three years before the proposal was announced on June 3. The highest open market price in the period was RM1.55 in July 2018, while the lowest was 46.5 sen in March this year.
At RM2 per share, the SCR values MMC Corp at RM6.08 billion. Alliance's estimated value of MMC shares put the company at a value of between RM10.1 billion and RM10.37 billion.
MMC is mainly involved in the ports and logistics, energy and utilities, as well as engineering and industrial development sectors. It holds 38.45% in Malakoff Bhd. It owns Pelabuhan Tanjung Pelepas Sdn Bhd, Johor Port Bhd, Northport (Malaysia) Bhd, Penang Port Sdn Bhd and Tanjung Bruas Port Sdn Bhd, as well as logistics operator Kontena Nasional Bhd and Senai Airport Terminal Services Sdn Bhd — the operator of Senai International Airport in Johor and Kertih Airport in Terengganu.