PETALING JAYA: Al-Hadharah Boustead REIT will be taken private by its parent company, BOUSTEAD HOLDINGS BHD, making it the first REIT in the country to be privatised, according to sources.
They speculated that the rationale for the exercise was the illiquid nature of Al-Hadharah’s shares. Boustead is likely to justify the exercise as an opportunity for shareholders to cash out at a price that was higher than the REIT's market value.
The announcement of the takeover would be made soon, the sources added. Affin Investment Bank Bhd would be handling the privatisation.
Both companies requested for their shares to be suspended last Friday “pending a material announcement”.
Al-Hadharah, listed in 2007, is the country’s first Islamic plantation-based REIT. Its share price rose only one sen to RM1.87 on Friday. The stock has gained 2% year-to-date but it is down 8% over a one-year period.
Al-Hadharah invests largely in plantation estates and mills.
It manages 12 oil palm estates and three palm oil mills in Peninsular Malaysia covering 19,945ha. Boustead Holdings owns 53.6% of the REIT, while Boustead’s parent, Lembaga Tabung Angkatan Tentera (LTAT) owns a further 12.7% directly in Al-Hadharah.
The main non-interested shareholders of Al-Hadharah include Lembaga Tabung Haji (8%), Kumpulan Wang Persaraan or KWAP (6.5%), Lembaga Kemajuan Tanah Persukutuan (2.34%), Kurnia Insurance Malaysia (1.56%) and Great Eastern Life (0.8%).
Earlier this year, Tan Sri Lodin Wok Kamaruddin, Boustead’s group managing director and Al-Hadharah’s chairman, had indicated that the REIT was on the lookout to buy plantation assets from third parties. Almost all of Al Hadharah’s plantation assets were acquired from its sponsor Boustead, which still has an agriculture landbank of 81,333ha.
Lodin also noted the REIT’s efforts at enhancing its plantation yields by continuing with its replanting activities.
Al-Hadharah gives its shareholders a decent dividend yield of around 5%, having declared dividends to the tune of RM62.7mil in 2012.
Its net asset per share stood at RM1.80 on March 31 and the book value of its assets at around RM1.3bil. Late last year, it undertook a revaluation exercise of 15 of its plantation assets that resulted in a net revaluation surplus of close to RM20mil.
Al-Hadharah’s buyout would be Boustead’s second in recent times.
Last year the conglomerate privatised another subsidiary, UAC Bhd, for RM4.30 per share, at an impressive 50% above the latter’s five-day volume weighted average market price.
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