PETALING JAYA: After being rebuffed by shareholders twice, Tan Sri Dr Ninian Mogan Lourdenadin is making his third attempt to take MBf Holdings Bhd private.
In a filing with Bursa Malaysia, Ninian, who owns 87% of MBf Holdings, has made a takeover offer for the remaining shares of the firm at RM1.50 each.
He has also offered to buy its remaining warrants at 50 sen each and outstanding redeemable convertible secured loan stocks issued by the company's wholly owned subsidiary Welllink Investments at RM4.64 each.
In the statement to the exchange, Mbf Holdings said: “The board does not intend to seek an alternative person to make a take-over offer for the offer shares.” The statement did not provide any rationale for the buyout exercise.
Would Ninian be third-time lucky?
The stock was among the most actively traded yesterday, closing at RM1.50 with 11.94 million shares done. Based on the company's latest financial statement, the RM1.50 offer is a 14% discount to its latest reported book value of RM1.74.
Zulkifli Hamzah, head of research at MIDF Amanah Investment Bank, pointed out: “Based on our estimates based on the firm's unaudited accounts as at the nine months ended September 2012, the net asset per share, excluding the net assets of MBF Cards that has been disposed and the proceeds from the sale of MBF Cards, is around RM1.54. Hence, the offer price is about one times our estimated net assets of MBF Holdings.”
Despite the low valuation, Zulkifli reckons the offer is a reasonable one. He pointed out that the price of MBF Holdings prior to the announcement of the privatisation had not been reflective of its remaining net assets following the sale of MBf Cards (M) Sdn Bhd to AMMB Holdings in December last year.
“In addition, we believe that the stock's lack of liquidity due to a shareholding spread of 11.29%, below the required 25%, has also resulted in its shares trading below book value.”
Zulkifli said the offer represented a 20.97% premium to its five-day volume-weighted average prices up until Feb 4 the last trading day prior to the suspension of its shares at RM1.24. “We deem this (offer) as fair, taking into account the lack of marketability/liquidity discount on the shares,” opined Zulkifli.
But with the privatisation, can the company's shareholders hope for the special dividend that had been promised at its recent EGM following the sale of its credit card business?
To recap, on Sept 14, it was reported that MBf Holdings was looking into the possibility of rewarding its shareholders with more dividends after the sale of MBf Cards to AMMB. Ninian was quoted as saying that the plan was to pay out a total of RM1 as dividend per share, which includes the special net dividend of 30 sen a share proposed earlier. At the EGM, the shareholders had unanimously voted in favour of the disposal of the credit card business for RM623.4mil cash.
According to the offer document by Ninian, if any dividend is paid out after the date of the notice and prior to the close of the offer, then the amount paid for the shares would be reduced by the amount of the dividend.
MBf Holdings had registered a cumulative net loss of RM437,000 in the nine months ended Sept 30, 2012 as opposed to a net profit of RM91.87mil in the same period a year ago.
In 2010, Ninian had tried to take MBf Holdings private through a proposed selective capital reduction and repayment exercise by offering 65 sen per share. But the offer was rejected by minority shareholders who viewed it as too low. At that time, Ninian held 79.12% in MBf Holdings.
Ninian had first tried to privatise MBf Holdings in 2006, where he offered 21.5 sen per share.
The 59-year-old doctor-turned-entrepreneur has been chief executive of MBF Holdings for close to ten years, and also runs a property, retail, leisure, plantation and medical empire under the Nadin Group of Companies that stretches across the Pacific from Malaysia to Fiji, Papua New Guinea and Australia.
While MBf Holdings may have been out of analysts' radar screens for several years, many investors still feel that the group has value to offer.
The company has been going through a restructuring exercise via the sale of non-core assets aimed at focusing on its core business, the Carpenter group, which is an international trading company that contributes about 80% in revenue to the MBF group.
If successful, MBf Holdings' privatisation would be notable as it represents the final curtain call for this group of companies. The company was a successful credit card issuer under the late Tan Sri Loy Hean Heong, when the group also owned the largest finance company in the country.
However, rapid over-expansion and the financial crisis of 1997 led the company into troubled waters. It entered into two sets of debt-restructuring schemes involving foreign and local creditors. It was during this time in 2002 that Ninian emerged to buy off MBf Holdings' shares from the foreign creditors, paving the way for him to take control from the Loy family.