Apex Equity, Mercury Securities to merge in RM140mil deal

The chief executive of one victim, depositor Saigonbank Berjaya Securities JSC (SBBS) - a unit of Malaysia's Berjaya Corporation Bhd - told Reuters that if the ruling was upheld, she had little hope of recouping her bank's $10 million from the perpetrator, who was sentenced to life imprisonment. "We can't afford to lose the case. This represents 70 percent of our capital. Our business may get suspended," Josephine Yei said in an interview.

KUALA LUMPUR: Apex Equity Holdings Bhd and Mercury Securities Sdn Bhd have entered into a heads of agreement (HOA) to merge their stockbroking operations.

Under the terms of the HOA, Mercury Securities has agreed to transfer its entire business into Apex for  RM140mil.

“The potential synergistic benefits to be derived from the proposed merger is envisaged to improve future earnings of Apex and provide for long term sustainability in the earnings of the merged entity,” Apex said in a filing with Bursa Malaysia on Friday.

Mercury Securities is one of the three non-bank backed players licensed by the Securities Commission that can undertake full-fledged corporate advisory services which include initial public offerings, mergers and acquisitions, take overs and privatisations, equity fund raising, underwriting and placement of securities. 

Based on the RM140mil price tag and Mercury’s adjusted profit after tax for the trailing 12-month period ended July 31, 2018, the deal valued Mercury Securities at 14.89 times its historical earnings.

“This is in line with the price-earnings ratio (PER) of listed companies involved in the similar business,” Apex said.

The two companies have three months to enter into a formal agreement.

Apex said it will pay RM22mil cash to Mercury Securities three days after the deal becomes unconditional. It will issue 100 million new shares at 92 sen each to Mercury Securities and pay the remaining RM26mil in cash to complete the deal.

To raise cash for the acquisition, Apex said it plans to place out 20 million new shares at a price to be determined at a later date. Mercury Securities will end up with a 31% stake in the enlarged Apex Equity group.

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