KUALA LUMPUR: YTL Corp Bhd plans to take its information technology (IT) subsidiary YTL e-Solutions Bhd private by offering new YTL Corp shares in exchange for YTL e-Solutions shares.
In a filing with Bursa Malaysia, the integrated infrastructure developer said it was offering to buy all the remaining voting shares of 10 sen each (excluding treasury shares) in YTL e-Solutions for 55 sen each.
This will be satisfied by issuing up to 116.078 million new YTL Corp shares of 10 sen each at an issue price of RM1.65 based on an exchange ratio of about 0.333 YTL Corp share for each offer share tendered.
YTL Corp currently holds 74.12% equity interest in the provider of IT hardware and software systems, network and Internet connectivity infrastructure, and web hosting services.
The offer is conditional, among others, on the approval of YTL Corp shareholders at an EGM for alloting and issuing to its directors and/or major shareholders YTL Corp shares or persons connected to them who are also securities holders under the offer, unless Bursa Securities gives a waiver from this.
On the rationale for the offer, YTL Corp noted the relatively low trading activity on YTL e-Solutions shares which did not present shareholders with the necessary platform to maximise the value of their investments in YTL e-Solutions via a continued listing on Bursa Malaysia.
“The total traded value of YTL e-Solutions shares over the two years preceding the last full trading day prior to the date of the notice (of share exchange offer) was RM50mil or 6.8% of the total market capitalisation of YTL e-Solutions (based on 5-day volume weighted average market price up to the last full trading day prior to the date of the notice) as compared to the total traded volume of YTL Corp shares of RM5.5bil or 32.2% of the total market capitalisation of YTL Corp over the same period,” it said.
YTL Corp said the proposed offer gave YTL e-Solutions securities holders an opportunity to reduce their exposure to a single industry in exchange for an investment in the diversified operations of the YTL Corp group.
YTL Corp expects the proposed offer to be completed by the second half of this year.
YTL Corp closed unchanged at RM1.69 on Monday while YTL e-Solutions shares shed half a sen to 54.5 sen.