Quick take: MMC Corp shares on a roll

KUALA LUMPUR: Shares in MMC Corp Bhd continued to attract investors' interest in early trade Tuesday.

The diversified group advanced 7.1%, or 12 sen to RM1.81. It is the third most active counter on Bursa Malaysia with over 63 million shares traded.

Last week, Tan Sri Syed Mokhtar Albukhary made an offer to take MMC Corp private via a selective capital reduction and repayment (SCR) exercise.

Under the proposed deal, minority shareholders in MMC Corp will receive RM2.94bil cash, or RM2 per share.

Syed Mokhtar’s vehicle Seaport Terminal (Johore) Sdn Bhd (STJ), which owns 51.76% or 1.58 billion shares in MMC, announced that it would be conducting the exercise for the 1.47 billion shares or 48.24% stake it does not own in the company.

STJ said the proposed SCR provides an opportunity for minority shareholders to exit the company at a substantial premium to prevailing market price.

Kenanga Research said based on its FY21 estimates, the proposed acquisition PER works out to 16x with PBV of 0.6x, representing premiums to average historical 1-year forward PER of 10x and PBV of 0.4x, respectively.

“This deal offers shareholders a chance to exit MMC given the current challenging situation (i.e. Suez Canal incident’s ripple effect, lockdown in several countries, and uncertainty in its Engineering segment).

“Against our current target price of RM1.05, we deem the MGO price of RM2 per share is an attractive exit price,” It said.

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MMC , STJ , privatisation , Syed Mokhtar Albukhary


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