PETALING JAYA: The major shareholders of Kurnia Setia Bhd, TAS group and Pahang Agriculture Development Board (LKPP), have made an offer to acquire the entire business, including assets and liabilities of the company, for about RM270mil cash.
In a statement yesterday, plantation company Kurnia Setia said following the proposed sale of the business, it would carry out a capital repayment to all the shareholders by way of cancellation of Kurnia Setia shares in issue.
Its shareholders will receive cash of RM2.40 per share while warrant holders will receive 90 sen per warrant.
The offer was made via Kreatif Selaras Sdn Bhd, a special purpose private limited company incorporated for the acquisition.
An official letter has been submitted to the Kurnia Setia board, setting out the details of the offer, which lapses on June 18. Trading in Kurnia Setia shares was halted on June 3 pending this announcement. Trading will resume on Monday.
Kurnia Setia, which owns 14,000ha of oil palm estates in Pahang, last traded at RM2.20 while its warrants closed at 89 sen.
The purchase price of RM270mil is based on the outstanding shares of Kurnia Setia as at yesterday – 101.5 million outstanding shares and 1.8 million outstanding options under Kurnia Setia’s employees share option scheme, translating to cash of RM248mil.
Meanwhile, there are 24.6 million outstanding warrants that would translate to cash of RM22.1mil, assuming none of the warrant holders exercise their warrants between now and the acquisition completion date.
Kurnia Setia warrants have a 10-year exercise/conversion period, maturing on April 20, 2018 and were issued free to subscribers of Kurnia Setia’s rights issue.
TAS group and LKPP hold 30.5% and 22.8% in Kurnia Setia respectively while the remaining shares are held by the public.
Upon completion of the acquisition, the shareholders of Kreatif Selaras, would be LKPP and Transaksi Madani Sdn Bhd which will indirectly hold 22.8% and 77.2% in Kurnia Setia respectively.
(TAS group will be the shareholder of Transaksi upon completion of the deal).
Kreatif Selaras chairman Tengku Tan Sri Meriam Sultan Ahmad Shah said Kurnia Setia’s listing status had not accorded a fair value to the company over the years as a result of the low daily trading volume.
“The acquisition gives minority shareholders an opportunity to exit and realise their investment at RM2.45 per share – that is the RM2.40 offer price and five sen dividend to be paid,” she said.
The company paid an interim dividend of 10 sen per share for its financial year ended Dec 31 and declared a final dividend of five sen per share, payable on Aug 3.
The cash consideration of RM2.40 per share and 90 sen per warrant for the proposed acquisition was arrived at after taking into account the performance of the average market price of Kurnia Setia shares over the past three years and earnings outlook for the company, which is mainly derived from sale of fresh fruit bunches.`
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