KUALA LUMPUR (Feb 27): The Melewar Group, which holds a collective 38.67% stake in MAA Group Bhd, is looking to take the Practice Notice 17 (PN17) company private at RM1.10 per share.

In a filing to the stock exchange, MAA said the privatisation will be carried out through a selective capital reduction and repayment exercise (SCR).

The group said it received a letter today from its major shareholders, Melewar Acquisitions Ltd and Melewar Equities (BVI) Ltd, which hold stakes of 28.82% and 9.85% respectively, as well as persons acting in concert, requesting MAA to undertake a SCR.

The persons acting in concert include MAA executive chairman Tunku Datuk Yaacob Kyra, Kyra Legacy Bhd and Melewar Equities Sdn Bhd.

Under the proposed SCR, entitled MAA shareholders will receive a total capital repayment of RM184.51 million, which represents a cash amount of RM1.10 for each share held by them on the entitlement date to be determined later.

"For the avoidance of doubt, the non-entitled shareholders (Melewar Acquisitions and Melewar Equities) will not be entitled to the repayment of capital pursuant to the proposed SCR," the major shareholders said in their offer letter.

Upon the completion of the SCR, MAA's issued share capital will be reduced by RM184.51 million and all 167.74 million shares held by the entitled shareholders will be cancelled.

MAA was classified as a PN17 company on Sept 30, 2011 following the disposal of its major business, and has since then explored various proposals to enhance its earnings profile and regularise its financial condition.

However, despite receiving multiple extensions of time from Bursa Securities to formulate and submit a regularisation plan, the group has yet to identify suitable proposals or viable acquisition opportunities, the offer letter noted.

As at the latest practicable date of Feb 26, none of the proposals contemplated by MAA have materialised, primarily due to the mismatched valuation expectations and a lack of fit with the company's corporate objectives, risk appetite and/or available financial capacity, the letter noted.

"We believe that the proposed SCR provides the most appropriate manner and at the premiums over the market prices of MAA shares," the major shareholders said in their offer letter.

At RM1.10, the SCR offer price represents a premium of three sen over the market price of MAA's shares on May 5, 2016 of RM1.07, which is the highest traded market price since the group was designated a PN17 company.

Notably, the offer price represents a premium of 84.5 sen or 331.37% above MAA's last traded price of 25.5 sen. The offer will remain open for MAA's board of directors' acceptance until March 29.

MAA's market capitalisation is RM164.11 million.