PETALING JAYA: The Hong Leong group is restructuring its building materials division, Tasek Corp Bhd, to transform the cement producer into a regional integrated building materials supplier. It is also rewarding Tasek shareholders with a dividend of 54 sen per share totalling RM99.6mil.
In a statement to Bursa Malaysia yesterday, Tasek said it had entered into a sale and purchase agreement with Singapore-listed Hong Leong Asia Ltd (HLA) to acquire the latter’s building materials business for S$323.5mil (RM751.36mil).
To finance the acquisition, Tasek would issue 212.25 million new Tasek shares at RM3.54 each.
The board also approved the special net interim dividend of 54 sen per share, which is conditional upon completion of the proposed acquisition.
Tasek said the issue price of RM3.54 per share was based on the volume weighted average price of the shares for the five market days up to and including April 23 of RM4.08 after deducting the 54 sen dividend.
After the completion of the proposed acquisitions, HLA’s total stake in Tasek would increase to 68.34% from 31.92%.
However, HLA and its parties acting in concert are seeking the approval of the Securities Commission and other Tasek shareholders for an exemption from undertaking a mandatory offer for the remaining shares.
To facilitate the proposed acquisition, Tasek has proposed to increase its authorised share capital from RM300mil now to RM1bil.
The unaudited proforma consolidated results of HLA’s building materials business showed a net profit of S$8.77mil (RM20.37mil) on revenue of S$210.91mil for the financial year ended Dec 31, 2006. For 2007, the proforma net profit stood at S$28.90mil and revenue at S$341.68mil.
“Through the proposed acquisition, Tasek shareholders will have an opportunity to participate in the performance of the building materials business and the resultant enlarged and diversified earnings base,” the statement said.
As a regional integrated building materials player, Tasek said its scale of operations would increase in regional markets like Singapore, Malaysia and Indonesia.
“The transformation is also expected to enhance the profile and market position of Tasek.
“Further, with an enlarged capital base, Tasek will be better positioned to pursue other acquisition opportunities for further growth as and when such opportunities arise,” it added.
Tasek said the board was positive about the prospects of the construction industry in Malaysia (especially in the development of Iskandar Malaysia) and Singapore due to the strong spending in private and public projects, including infrastructure.
This would translate into higher demand for building materials, it said.
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