Business

Saturday November 14, 2009

NSTP soars following Media Prima’s revised offer

By YEOW POOI LING


PETALING JAYA: Shares in The New Straits Times Press (M) Bhd (NSTP) soared 20% to RM2.40 upon resumption of trading yesterday.

This was following Media Prima Bhd (MPB)’s revised proposed takeover offer, which gives an implied value of RM2.40 per NSTP share instead of RM2 previously.

On Thursday, MPB told Bursa Malaysia that the ratio of the share-swap for the proposal would be raised to 1.2 new Media Prima shares for every one NSTP share instead of 1-for-1 in the initial offer.

In a separate announcement, NSTP declared a special dividend of 40 sen per share to its shareholders.

A bank-backed brokerage said the revised share swap offer, as well as the original unchanged one free warrant per five NSTP shares, effectively valued NSTP at RM2.50 per share.

“At RM2.50 per share, NSTP is valued at an implied price-to-earnings of 11 times and price-to-net tangible asset of 0.5 times based on fiscal year ending Dec 31, 2009 (FY09) earnings,” it said in a report.

Another research house said the revised terms improved the chances of acceptance by NSTP’s minority shareholders.

“MPB will have no problem achieving the 51% threshold as it already holds 43% of NSTP. The challenge is to achieve at least 90% as that would allow it to take NSTP private.

“It would take about 40 days from the date of offer before details for the level of acceptance are available,” it said.

It maintained a “neutral” recommendation on NSTP as “an immediate reaction to this news is likely to take the share price close to the effective offer price,” the brokerage said. MPB’s share price, meanwhile, rose 4 sen to RM1.74 yesterday upon resumption of trading in the counter.

In a filing with the exchange, the company said it acquired Kurnia Outdoor Sdn Bhd and Jupiter Outdoor Network Sdn Bhd for RM46.4mil.

MPB would initially buy an 80% stake in Kurnia and Jupiter respectively, with the remaining 20% to be acquired over the next 2½ years.

“With the acquisition of Kurnia and Jupiter, MPB will control the vast majority of large expressway concession in Malaysia,” the company said.

Kurnia, the country’s second largest outdoor advertising company, made a net profit of RM5.9mil on revenue of RM24.9mil for the year ended Dec 31, 2008 while Jupiter’s net profit stood at RM647,000 on turnover of RM1.5mil.

In a statement, MPB said the acquisitions were expected to raise the group’s market share of the outdoor advertising business to 42% from 33%.

Its outdoor operations, anchored by Big Tree Outdoor, saw revenue rose 21% for FY08 and now contributes about 13% of group turnover.

“The addition of Kurnia and Jupiter is projected to raise total revenue of more than RM100mil,” MPB said.

 
NSTP :  [Stock Watch]  [News]

  • E-mail this story
  • Print this story