Hunza jumps 14% on privatisation offer

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KUALA LUMPUR (Mar 23): Hunza Properties Bhd increased as much as 29 sen or 14% to RM2.39 on news its major shareholders intend to privatise the company at RM2.50 a share.

Last Friday, Khor Teng Tong Holdings Sdn Bhd, which holds a 32.3% stake in Hunza (fundamental:1.70; valuation: 1.2) had expressed its intention to privatise the company via a selective capital reduction and repayment (SCR).

Today, Hunza shares pared gains after rising to its intraday high. At 10.44 am, Hunza was traded at RM2.34 with 1.19 million shares changing hands.

The stock was the second largest gainer across the exchange. At 11.22am, Hunza was traded at RM2.36.

Last Friday, Hunza said Khor Teng Tong Holdings and friendly parties own a combined 59% of the company's issued share capital.

Under the SCR, minority shareholders or entitled shareholders, who own approximately 41% of Hunza, will receive capital repayment of RM230.72 million or RM2.50 for each Hunza share.

The cash will be derived from the reduction of Hunza's issued and paid up capital by
RM230.72 million via cancellation of 230.72 million shares.

In view that the number of shares to be cancelled under the SCR is higher than its existing issued and paid up share capital of 225.1 million shares, the offeror has proposed a bonus issue to increase Hunza's share capital to a level which is suitable for capital reduction.

Upon completion of the SCR, Khor Teng Tong Holdings and friendly parties will own 100% of Hunza. The offeror plans to delist Hunza from Bursa Malaysia.
 
(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. )