Business

Tuesday March 15, 2011

MPHB signs share sale agreement with Asia 4D


sharidan@thestar.com.my


By SHARIDAN M. ALI

PETALING JAYA: Multi-Purpose Holdings Bhd (MPHB) has firmed up its acquisition plan to gain full control of Magnum Holdings Sdn Bhd via share sale with Asia 4D Co Ltd that is expected to be completed in the second quarter of this year.

Previously, MPHB that held 51% stake in Magnum, had only forged a memorandum of understanding for the acquisition of Asia 4D's 47% stake in Magnum.

In a filing with Bursa Malaysia yesterday, MPHB said it had entered into a share sale agreement with Asia 4D to acquire the latter's stake in Magnum for RM724.8mil to be satisfied via the issuance of 315.1 million RM1 shares in Multi-Purpose at an issue price of RM2.30 each.

MPHB has also entered into a subscription agreement to subscribe to new irredeemable convertible preference shares in Asia 4D for RM875.2mil by RM809.2mil cash and the issuance of 28.7 millions of new MPHB shares at an issue price of RM2.30.

Additionally, MPHB has also entered into a share sale agreement with the management of Magnum for the acquisition of its 2% stake in Magnum for RM30.8mil to be satisfied via 13.4 million new MPHB shares at RM2.30 each.

Collectively, the price tag for the acquisition plan and subscription agreement stood at about RM1.63bil.

MPHB said the proposals would enable it to have full ownership in Magnum, thus making gaming the core business of the group.

“The proposals are expected to further improve and strengthen the future profitability and cashflow position of the group via the higher share of Magnum's earnings and cashflows.

“The enlarged share capital following the issuance of the new MPHB shares will strengthen its balance sheet and improve its liquidity. They are also expected to widen the investor base appeal, including institutional investors, due to better clarity in its core business.

“The focus of the Multi-Purpose moving forward will be in the business of gaming and this presents an opportunity for rationalisation of the group's non-core assets through a divestment programme to be initiated,” it said.

In its Feb 16 filing, Multi-Purpose said its issued and paid up share capital would increase to RM1.44bil post acquisition from RM1.07bil as at Dec 31, 2010.

Post acquisition, Asia 4D would also emerged as one of the major shareholders of Multi-Purpose with 24.1% stake.

However, Asia 4D planned to place out up to 183.8 millions of Multi-Purpose shares to placees to be later identified where Casi Management Sdn Bhd, a major shareholder of Multi-Purpose, had intended to buy up to 78.7 million shares under the proposed placement.

Analysts with research houses that covered Multi-Purpose were not available yesterday for comment.

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