PETALING JAYA: IGB Corp Bhd will put forward a proposal to its shareholders to take the company private.
In an announcement yesterday, IGB said that the proposal by its biggest shareholder Goldis Bhd to privatise the former that is the owner of Mid Valley Megamall will be forwarded to its shareholders to decide.
This follows after a deliberation by IGB’s board of directors on this matter where it requested at the end of March for an extension up to April 28 to evaluate the proposed offer.
In a statement to Bursa Malaysia, IGB said the board of directors, minus interested directors, has deliberated on the offer by Goldis and has decided to put forward the offer to the eligible shareholders for consideration based on the preliminary opinion of the independent adviser.
Goldis which owns 73.43% of IGB is proposing to privatise the latter for an offer price of RM3 for each IGB share not yet owned by itself and Goldis’ persons acting in concert (PAC).
The privatisation is proposed to be carried in either one of the three ways. Shareholders may choose a 100% cash option where the entire privatisation offer price of RM3 be fully satisfied in cash.
IGB’s shareholders may also choose a combination of cash and shares: of which 30% of the offer price or 90 sen will be settled in cash and 70% of the offer price or RM2.10 will be settled through the issuance of new ordinary shares in Goldis at an issue price of RM3 per Goldis share.
Shareholders may also choose the cash and redeemable convertible cumulative preference shares (RCCPS) option: wherein 20% of the offer price or 60 sen will be settled in cash and 80% of the offer price or RM2.40 will be settled via the issuance of new RCCPS of a new class in Goldis at an issue price of RM3.28 per new RCCPS.
“The new RCCPS has the right to receive cumulative preferential dividends at the rate of 4.3% per year based on the new RCCPS issue price, and its tenure is seven years, with a conversion ratio of 1 new RCCPS into 1 new Goldis share,” the statement said.
The new RCCPS shall rank ahead in regards to payment of dividends on all classes of shares of the issuer, other than the existing RCCPS, the company said.
The new RCCPS dividends will be paid on a semi-annual basis subject to the availability of distributable profits and applicable laws.
The statement further said that some 26.57% of IGB’s shares that are not owned by Goldis and its PAC are eligible for this offer and the total consideration for this scheme is approximately RM1.06bil.
“Upon completion of this exercise, IGB will become a wholly-owned subsidiary of Goldis. It is envisaged that the full consolidation of the businesses of IGB and Goldis will create a more cohesive and efficient operating structure going forward,” the announcement said.
It further noted that IGB and Goldis are currently required to comply with the listing obligations by Bursa Securities for listed issuers, representing an overlap of administrative efforts and costs.
“The proposed delisting (of IGB) is expected to eliminate such overlap, dispense with expenses in maintaining the listing status of IGB and re-divert resources towards its core business,” it added.
The privatisation effort by Goldis is the first by the company to absorb and to de-layer the shareholding structure between Goldis and IGB.
The earlier corporate exercises in 2013 was for a proposed merger while the 2014 exercise was a voluntary general offer to increase its stake in IGB.
Goldis is a property investment company that is controlled by the Tan family which is led by Datuk Tan Chin Nam.
The crown jewel of the group is located at Goldis’ subsidiaries: IGB Corp Bhd and IGB Reit, while the family’s interest is mainly concentrated at Goldis.
StarBizWeek had recently reported that a de-layering or a simplification of the corporate structure would work well for all shareholders of Goldis.
The latest takeover differs from the voluntary general offer made in July 2014 which was proposed at RM2.88 per share and without any option of obtaining Goldis’ shares.
This latest takeover offer has this option and an RCCPS option as well.
For this privatisation to be successful, it will require a 75% shareholder approval out of the 26.57% shareholders that are eligible to vote.
IGB has prized assets such as Mid Valley City, which comprises 2.7 million sq ft of retail mall space, 3.2 million sq ft of prime office space in Kuala Lumpur and over 5,500 hotel rooms across the globe, according to a note by AllianceDBS Research.
IGB also owns a 52.3% stake in IGB Reit, which, in turn, owns Mid Valley Megamall and The Gardens Mall.
IGB’s balance sheet has also received an additional boost with the sale of the Renaissance Kuala Lumpur Hotel for RM765mil that was completed earlier this year.