KUALA LUMPUR (Oct 1): Shares in MMC Corp Bhd remained largely unchanged on Friday (Oct 1) after shareholders approved the move by its controlling shareholder Tan Sri Syed Mokhtar Albukhary to take the group private via a selective capital reduction (SCR) and repayment exercise at RM2 per share.
At 3.17pm, the stock was unchanged at RM1.95, with 10.93 million shares changing hands. Its market capitalisation stood at RM5.97 billion.
MIDF Research downgraded its call on MMC to "neutral" from "buy" following a rebound in the group’s share price in anticipation of the favourable outcome from the extraordinary general meeting (EGM) on Thursday.
The EGM, which was held to decide on the proposed SCR exercise by the tycoon's private vehicle Seaport Terminal (Johore) Sdn Bhd (STJSB), was overwhelmingly supported by the minority shareholders.
“As per our report on MMC dated June 4, we opined that the proposed SCR exercise is a great value-unlocking mechanism for a counter that is persistently trading at discounted valuation,” said MIDF Research.
The local research house maintained its target price (TP) of RM2 for the counter and made no changes to its earnings estimates.
“Arguably in anticipation of the favourable outcome from the EGM, the share price of MMC rebounded from a low of RM1.63 earlier this week to close at RM1.95 on Thursday.
“We thereby downgrade our recommendation on MMC to 'neutral’, with an unchanged TP of RM2, which equates to the SCR offer price,” it said in a note to investors.
On June 3, STJSB, which owned a controlling 51.76% stake in MMC, announced the SCR exercise for the remaining 48.24% stake it did not own in the company.
According to STJSB, the SCR is being done to allow greater flexibility to MMC in managing and developing its existing businesses, while exploring opportunities without regulatory restrictions and compliance costs associated with its listing status.
MMC is mainly involved in the ports and logistics, energy and utilities, as well as engineering and industrial development sectors. It holds a 38.45% stake in Malakoff Corp Bhd.
It also owns Pelabuhan Tanjung Pelepas Sdn Bhd, Johor Port Bhd, Northport (Malaysia) Bhd, Penang Port Sdn Bhd and Tanjung Bruas Port Sdn Bhd, as well as logistics operator Kontena Nasional Bhd and Senai Airport Terminal Services Sdn Bhd — the operator of the Senai International Airport in Johor and Kertih Airport in Terengganu.