Boustead rises as much as 14.3% on report LTAT will privatise it via SCR, higher takeover price

Boustead rises as much as 14.3% on report LTAT will privatise it via SCR, higher takeover price
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KUALA LUMPUR (Jan 18): Shares in Boustead Holdings Bhd rose as much as 9.5 sen or 14.3% earlier this morning after news broke again that Lembaga Tabung Angkatan Tentera (LTAT) had decided to take the company private.

As at 12.10pm, Boustead had pared some of its gains and was up 7.52% or five sen at 71.5 sen, valuing the company at RM1.45 billion. Some 25.93 million shares were traded. While the counter was down 23% from 93 sen a year ago, it was still 104% higher from last year’s trough of 35 sen.

The Edge, in a report over the weekend, cited sources as saying that the privatisation can be done via a selective capital reduction and repayment (SCR) exercise, and also at a higher takeover price.

It was reported that LTAT and Boustead were working out the details of the proposed privatisation and planning to make an announcement within the next two to three weeks — before Feb 2 this year.

The Edge wrote that the armed forces fund is also likely to raise its indicative price of 80 sen per share, proposed in May last year, to “potentially more than 90 sen per share, or maybe even RM1 per share”, taking into account the value of the company’s stakes in three public listed companies — Boustead Plantations Bhd, Pharmaniaga Bhd and Affin Bank Bhd – which had risen over the past few months.

Since May 28 last year, when LTAT first confirmed that it was considering taking Boustead private at an indicative price of 80 sen per share, shares in Boustead Plantations had risen 75% to close at 58.5 sen last Friday, while the share price of Pharmaniaga more than doubled to settle at RM5.25. Affin Bank shares gained 11% to close at RM1.71 last Friday.

In July 2020, the Securities Commission Malaysia (SC) gave LTAT until Oct 27 to announce its firm intention of the proposed privatisation, and subsequently granted it another four-month extension to Feb 2 this year to do so.

Surin Murugiah