(June 3): The controlling shareholders of MMC Corp Bhd, whose share price has soared nearly 30% over the past two weeks, are said to be planning to take the conglomerate private through selected capital repayment.
The group’s shares and warrants have been suspended from trading at the noon break. It climbed 10 sen in the morning trading session.
Market talk has it that the diversified group, which has been undervalued, is subject to a privatisation exercise via a selective capital reduction of about RM1.80 to RM2 per share.
Sources familiar with the exercise said the privatisation is to pave the way for a bigger restructuring exercise that could involve the listing of its port business.
MMC shares were last traded at RM1.30, valuing it at RM3.96 billion.
Tycoon Tan Sri Syed Mokhtar Albukhary controls 51.76%, or 1.576 billion shares, in MMC via Seaport Terminal (Johore) Sdn Bhd, while Permodalan Nasional Bhd’s (PNB) unit Amanah Saham Bumiputera (ASB) holds 20.3% or 618.57 million shares.
Collectively, the duo control a 72.06% shareholding in the conglomerate, which owns a 38.45% stake in Malakoff Corp Bhd.
MMC's issued share capital is at 3.045 billion units. This means that the two will have to buy out about 851 million shares.
As at March 31, MMC’s balance sheet showed that its cash balance stood at RM553.3 million, while “other investments” amounted to RM2.076 billion.
MMC is mainly involved in the ports and logistics, energy and utilities, engineering and industrial development sectors.
Over the past five years, MMC's share price has been on a decline from the peak of RM2.50 to a low of 42.1 sen in March last year. For comparison, in terms of its price to earnings (PE) ratio, MMC is trading at trailing twelve months (TTM) PE ratio stands at 8.27 times based on its last traded price of RM1.30. Meanwhile, Westports Holdings Bhd’s TTM PE ratio stands at 27.12 times. Both of which are involved in port business.