Business

Thursday February 10, 2011

MPHB signs MoU to buy balance 49% of Magnum


PETALING JAYA: Multi-Purpose Holdings Bhd (MPHB) is a step closer to the possible relisting of Magnum Corp Bhd on Bursa Malaysia, following a deal that would give it full ownership of the gaming outfit.

In an announcement to Bursa Malaysia yesterday, MPHB said it had entered into a memorandum of understanding (MoU) with several parties to acquire the balance 49% stake it did not already own in Magnum Holdings Sdn Bhd, the investment holding firm whose subsidiaries are principally involved in the operation of four-digit numbers forecast betting games.

The MoU that MPHB signed with wholly-owned subsidiaries of CVC Capital Partners Asia 4D Holdings Ltd and Asia 4D Company Ltd as well as certain members of the management of Magnum, also involved the proposed acquisition of RM674.66mil nominal value redeemable convertible loan stock class C of Magnum (RCULS-C).

(CVC owned 47% stake in Magnum, while the management portion represented 2% equity interest in the company.)

MPHB moves a step closer to the possible relisting of Magnum Corp.

MPHB said the total purchase consideration for the acquisitions would come to about RM1.64bil, which would be satisfied with the issuance of new MPHB shares and cash.

“The proposed purchase consideration was arrived at after taking into account, among others, the audited net assets of the Magnum group of companies of about RM1.071bil as at Dec 31, 2009; the nominal value of and the outstanding interest accrued on the RCULS-C and the future earnings potential of Magnum,” MPHB said.

“The proposed acquisition is expected to further improve and strengthen the future profitability and cash-flow position of the MPHB group via the higher share of Magnum's earnings and cash flows. The enlarged share capital following the issuance of the new MPHB shares will strengthen its balance sheet and improve its liquidity,” it added.

MPHB said the acquisition of the stake in Magnum from CVC group, which totalled RM1.6bil, would involve an issuance of around 344 million new MPHB shares at RM2.30 each and cash amounting to around RM809.2mil.

MPHB acknowledged that it was the intention of Asia 4D Holdings and Asia 4D Co to retain 160 million MPHB shares and to subject their remaining MPHB shares to placement arrangements by third parties.

The acquisition of the stake in Magnum from the latter's management, meanwhile, would involve the issuance of about 16 million new MPHB shares, also at RM2.30 each.

Trading in MPHB shares had been suspended since Monday, pending this announcement.

It is no secret that MPHB had been wanting to relist Magnum. In August last year, the company announced to Bursa that it was in a preliminary stage of looking at a possible relisting of Magnum. Magnum was taken private three years ago in a deal worth RM4bil.


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