MMC to buy KWAP’s 9.08% stake in NCB for RM186.5m, confirms Edge Weekly report

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KUALA LUMPUR (July 15): MMC Corp Bhd is buying Kumpulan Wang Persaraan (Diperbadankan)'s (KWAP) 9.08% stake in NCB Holdings Bhd for RM186.5 million cash or RM4.37 per share, confirming The Edge's report on June 29, 2015 which said MMC was eyeing KWAP’s stake in NCB.

Upon completion of the acquisition, MMC’s interest in NCB will increase from 21.05% to 30.13%. NCB owns both Northport (M) Bhd and Kontena Nasional Bhd.

MMC, which is controlled by tycoon Tan Sri Syed Mokhtar Albukhary, on July 1, 2015 issued a clarification on The Edge’s article to Bursa Malaysia, stating that it has not approached KWAP to acquire its interest in NCB, as reported in the article.

In a filing with Bursa Malaysia, however, MMC said its wholly-owned subsidiary, MMC Ventures Sdn Bhd, today signed a sale and purchase agreement with KWAP for the acquisition of 42.68 million shares representing 9.08% equity interest in NCB via an off-market direct business transaction.

MMC said the consideration of RM4.37 per share was arrived after taking into account the closing price of NCB at the end of business trade of RM4 as at July 14, 2015, which entails a premium of 9.25%.

The purchase consideration is to be paid by MMC via internal funds.

“The acquisition is in line with the initiative of the MMC board of directors to make further strategic investment in MMC’s core business, that is, ports and logistics division, to strengthen MMC and its subsidiaries financial position.

“It is also expected that the acquisition would contribute positively to the future earnings of the group, and in addition, the acquisition will bode well for MMC Group in its effort to maintain its position as a key player in the ports industry in Malaysia,” said MMC.

MMC (fundamental: 0.4; valuation: 2) shares closed down 2.97% today to RM2.29 rising to a market capitalisation of RM7.19 billion. NCB's (fundamental: 0.4; valuation: 2) share price was up 0.25% to settle at RM4.01, with a market cap of RM1.88 billion.

(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.)