This article first appeared in The Edge Financial Daily, on October 27, 2015.

KUALA LUMPUR: 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 yesterday, 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, PJP and TTS have a common major shareholder and director in Tan Sri 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 behind acquiring the sale shares is to tap into the potential growth prospect in RSB and potential appreciation in value of the sales 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 sen 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 Sunday.

“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 logs, 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.