Berjaya Group in takeover of REDtone but Johor Sultan says not selling stake

KUALA LUMPUR:  Berjaya Group Bhd has launched a takeover of REDtone International Bhd and is offering 80 sen a share, which could be seen as too low.

However, the Sultan of Johor, who owns 134 million REDtone shares or 20.13% has stated he will not be selling his stake.

BCorp said it had earlier Friday bought 70.09 million shares or 10.53% stake for RM56.08mil or 80 sen a share in an off-market deal from Indah Pusaka Sdn Bhd in which Tema Juara Sdn. Bhd is deemed interest.

Following the acquisition, BGroup and parties acting in concert raised their total stake to 35.84% or 238.54 million shares.

They also owned 109.30 million of the 2.75% 10-year irredeemable convertible unsecured loan stocks 2010/2020 (ICULS). 

BGroup is offering 80 sen each for the outstanding 64.16% shares and 32 sen for the outstanding 97.50 million ICULS.

StarBiz reported earlier Friday that BCorp, which owned 28.29%, could be undertaking a major corporate exercise involving REDtone.

StarBiz reported BCorp could have bought 10.53% or 70.1 million shares in REDtone at 80 sen each which were crossed at midday. The block could have come from Tema Juara Sdn. Bhd which is deemed interest in 10.53% or 70.09 million shares of REDtone. 

BGroup said the offer price of 80 sen a share was a discount of 4.6% from the five-day volume weighted average market prices (VWAMP) of 4.6 sen and two sen below the one-month VWAMP. However, it is 2.6 sen abover the onbe-year VWAMP of 77.4 sen.

It was also three sen below the pre-suspension price of 83 sen on Friday.

BGroup said the offer price was at a price-to-earnings of 18.1 times based on the audited consolidated basic earnings per share of 4.42 sen at FY ended May 31, 2014.

It was also at a price-to-book multiple of 3.09 times based on the audited consolidated net asset per share as at May 31, 2014 of 25.85 sen.

BGroup said it would want to maintain the listing status of REDtone.
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