PETALING JAYA: Berjaya Corp Bhd has signed a memorandum of understanding (MOU) with Berjaya Retail Sdn Bhd (BRetail) and Tan Sri Vincent Tan, the major shareholder of both BCorp and BRetail, to acquire 100% stake in Singer (M) Sdn Bhd from BRetail for a net payment of RM388mil.
The deal is after the set-off of the inter-company debts of the Singer Group of RM148million against the purchase consideration of RM536 million.
As at Dec 31,2019, the unaudited net assets of the Singer Group was RM561mil.
In a statement, BCorp said the acquisition would involve the issuance of new BCorp shares at an issue price of 33 sen each.
This would represent a premium of 14 sen or about 74% over last Friday’s closing price of 19 sen per BCorp share.
“BCorp will issue about 1.2 billion BCorp shares for the net payment of RM388mil.
“In addition, Tan will provide to BCorp a profit guarantee that Singer will achieve a profit after tax of RM20mil per year for 2020 and 2021.
“Based on net payment of RM388mil for the 100% stake in Singer, this profit guarantee of RM20mil per year will translate to a net price-earnings multiple of 19.4 times, ” BCorp said.
Singer had an existing issued share capital of RM438mil.
The group is principally involved in marketing, retailing and direct selling of consumer durable products and motorcycles on cash, credit, hire purchase schemes, equal payment schemes and credit sales schemes.
Tan, who is also executive chairman of BCorp, said: “Singer has been in Malaysia for more than 100 years and is a well-known and trusted household brand name, with a wide retail network of more than 450 stores nationwide and about 3,000 independent sales agents.
“I am confident that the acquisition of Singer will enhance the profile of our group and complement BCorp’s diverse range of businesses.
“I believe that the acquisition will contribute positively to the future earnings of the BCorp Group.”
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