KUALA LUMPUR (Oct 26): Jaya Tiasa Holdings Bhd's wholly-owned subsidiary, Multi Greenview Sdn Bhd, has acquired a 9.87% stake in Rimbunan Sawit Bhd (RSB) for RM70 million to expand its interest in the oil palm sector.

In a filing with Bursa Malaysia today, Jaya Tiasa (fundamental: 0.3; valuation: 1.4) said it acquired a total of 140 million shares from related parties, Pemandangan Jauh Plantation Sdn Bhd (PJP) (100 million shares) and Tiong Toh Siong Holdings Sdn Bhd (TTS) (40 million shares).

Jaya Tiasa, RSB (fundamental: 0.2; valuation: 0.9), PJP and TTS have a common major shareholder and director in Tan Sri Datuk Sir Diong Hiew King @ Tiong Hiew King.

Jaya Tiasa said the consideration was made in cash and funded by borrowing.

“The company is of the view that the acquisition is positive. The main rationale to acquire the sale shares is to tap on the potential growth prospect in RSB and potential appreciation in share value of the sale shares.

“This also represents an opportunity for Jaya Tiasa to expand its interest in the oil palm sector, since this is the main asset of RSB,” it said.

The purchase consideration was arrived at, on a willing-buyer willing-seller basis, at par value of RSB ordinary shares of 50 each, representing a discount of 7.4% from 54 sen, the volume weighted average market price of the sales shares for the five market days ended Oct 23, 2015.

“The acquisition is not expected to have a material effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholding of the company,” it said.

An integrated timber producer with access to timber concessions in Sarawak, Jaya Tiasa also manufactures and distributes a wide range of high quality timber products, including round longs, plywood, and sawn timber.

Also involved in oil palm development and milling activities, Jaya Tiasa’s counter closed unchanged at RM1.28, for a market capitalisation of RM1.2 billion; whereas RSB fell half sen or 0.94% to close at 52.5 sen, for a market capitalisation of RM751.8 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.)