KUALA LUMPUR (March 3): Shares in Boustead Holdings Bhd surged 30.53% or 20 sen to close at 85.5 sen on Friday (March 3), matching Lembaga Tabung Angkatan Tentara (LTAT)’s offer price to take over the conglomerate.
Earlier during the day, the counter had gained 20.5 sen or 31.3% to an intra-day high of 86 sen, briefly breaching LTAT’s offer price of 85.5 sen apiece to purchase the Boustead shares it does not already own.
Nonetheless, the counter’s 20 sen gain at market close pegs it among Bursa Malaysia’s top gainers on Friday. It was also the most actively traded stock on the bourse with 231.72 million shares transacted.
At 85.5 sen, the group is valued at RM1.72 billion. Over a one-year period, the counter has risen 32.39%.
Notably, its 52%-owned pharmaceutical unit Pharmaniaga Bhd was also on the bourse’s most active list with 65.49 million shares traded. The drugmaker’s share price ended 2.5 sen or 10% higher at 27.5 sen, valuing the company at RM353.38 million.
The spike in Boustead’s share price comes after LTAT made a voluntary takeover offer on Tuesday (March 2) to acquire the remaining 822.51 million Boustead shares or 40.58% stake it does not own at 85.5 sen apiece ― or a cumulative RM703.25 million.
In the offer notice, LTAT shared that it does not intend to maintain Boustead’s listing status. The armed forces pension fund owns a 59.42% stake in the group.
The move is on the heels of the conglomerate posting a hefty quarterly net loss of RM402 million, weighed down by a RM552 million impairment of unsold Covid-19 vaccines at Pharmaniaga.
While Boustead’s share price has surged to match LTAT’s offer price of 85.5 sen at Friday's close, it remains a sharp discount of 52% over the group’s net asset per share of RM1.64.
LTAT underlined that the offer is not conditional upon any minimum acceptances, citing its 59.42% stake in Boustead, which exceeds the minimum 50% of voting shares needed.
However, it added that the offer is conditional upon the approval of Bank Negara Malaysia, as well as the minister of finance, Prime Minister Datuk Seri Anwar Ibrahim.
LTAT said the conditions must be fulfilled within 21 days after the first closing date, in accordance with the Securities Commission Malaysia (SC)’s rules on takeovers, mergers and compulsory acquisitions.
Besides Pharmaniaga, Boustead also owns a 64.99% stake in Boustead Heavy Industrial Corp Bhd (BHIC), a 57.42% stake in Boustead Plantations Bhd and a 20.93% stake in Affin Bank Bhd.
LTAT noted that the takeover offer on Boustead will not result in a mandatory offer to acquire all remaining voting shares in Pharmaniaga, BHIC, Boustead Plantations and Affin Bank, in view that it already has statutory control over Boustead.
For the fourth quarter ended Dec 31, 2022 (4QFY2022), Boustead was dragged into the red with a net loss of RM402.3 million due to being weighed down by Pharmaniaga’s RM552.3 million impairment provision for unsold Covid-19 vaccine stock.
Boustead’s loss per share came out to 19.85 sen, in contrast to an earnings per share of 3.88 sen recorded in 4QFY2021, with a net profit of RM78.6 million.
This came despite a 24.74% rise in quarterly revenue to RM3.69 billion from RM2.96 billion previously, lifted by better contributions from all of its business divisions.
Nonetheless, Boustead closed the financial year ended Dec 31, 2022 (FY2022) with a net profit of RM62 million, but down 63.55% year-on-year versus the RM170.1 million logged in FY2021. Full-year revenue jumped 33.64% to RM15.11 billion, from RM11.31 billion previously.