OSK Property Holdings Bhd (+ve)
OSK Property (OSKP) (Fundamental: 1.9/3, Valuation: 2.4/3) triggered our momentum alert on active trading last Friday, closing unchanged at RM1.95.
The company is currently in the midst of a merger exercise with OSK Holdings Bhd (OSKH) and PJ Development Holdings Bhd (PJD).
To recap, shareholders of OSKH had, on July 6, approved the acquisition of 72.4% equity interest in OSKP for RM346.4 million or RM1.95 per share. The acquisition has been completed with the issuance of 177.6 million new OSKH shares at RM1.95 each.
Consequently, OSKH will extend the unconditional take-over offer to acquire all the remaining shares and outstanding warrants of OSKP at RM1.95 per share (satisfied either by cash or share swap) and RM1.00 per warrant (satisfied by cash), respectively. The unconditional take-over offer document was dispatched to the shareholders and warrantholders of OSKP on August 10.
The offer, which was previously open for acceptances until 5.00 p.m. on September 1, has been extended to 5.00 p.m. on September 15. OSKH plans to maintain the listing status of OSKP. However, in the event OSKH receives 90% acceptances of the shares not already owned, it intends to compulsorily acquire any remaining shares and delist OSKP from Bursa.
OSKH is also acquiring the remaining shares and warrants of another related company, PJD. Upon completion of the entire exercise, OSKH will emerge as a first tier property group in Malaysia with market capitalisation of over RM3 billion.
OSKP has total landbank of 1,274 acres, mainly in Sungai Petani and Seremban, with potential gross development value (GDV) of RM4.7 billion. Unbilled sales stood at RM800 million at end-April 2015, equivalent to 1.2 times sales in 2014.
For 1H15, revenue jumped 38.1% y-o-y to RM447.2 million while net profit expanded 44.4% to RM72.5 million, mainly due to the disposal of freehold land to PR1MA Corporation Malaysia and increased construction work for on-going projects.
This article first appeared in digitaledge Daily, on September 7, 2015.