LTAT makes voluntary offer to take Boustead Holdings private

LTAT is expected to spend about RM700mil for the takeover.

PETALING JAYA: The Armed Forces Fund Board, also known as Lembaga Tabung Angkatan Tentera (LTAT), has made a voluntary takeover offer for all shares it does not already own in Boustead Holdings Bhd (BHB) for 85.5 sen per share.

Based on the number of outstanding shares of 822.51 million or 40.58% of BHB, LTAT is expected to spend RM703.25mil in the takeover.

Trading in BHB was suspended yesterday from 2.30pm to 5pm. The counter was last traded three sen higher at 65.5 sen with 5.09 million shares traded.

In a statement, LTAT said the takeover offer is not conditional upon any minimum level of acceptances as it (LTAT) already holds more than 50% of the voting shares in BHB.

“However, the offer is conditional upon the Finance Minister’s approval upon Bank Negara recommendation and its approval under Section 87 of the Financial Services Act 2013 (FSA), as well as Section 99 of the Islamic Financial Services Act 2013 (IFSA) to allow the offeror to acquire up to 100% equity interest in BHB,” it said.

LTAT also said the offer is conditional upon waiver from the central bank from complying with Section 110 of the FSA and Section 122 of the IFSA, in relation to the requirement for LTAT and/or its nominated company to be approved as a financial holding company of Affin Bank Bhd and other relevant licensed entities.

“These conditions must be fulfilled within 21 days after the first closing date, as stipulated in the Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the Securities Commission.”

It added that the offer represents a significant step for LTAT in taking BHB private.

LTAT explained that the exercise will allow it greater flexibility to implement the turnaround plan for BHB, as part of its objective in ensuring the sustainability of the fund for the Malaysian Armed Forces and veterans, in line with LTAT’s ongoing transformation plan.

“LTAT presently does not have any plan to dismiss or make redundant any of the employees of BHB Group as a direct consequence of the offer.

“For clarity, the offer will not result in a mandatory offer by LTAT to acquire all the remaining voting shares in Affin Bank, Boustead Plantations Bhd, Boustead Heavy Industries Corp Bhd and Pharmaniaga Bhd that are not already held by LTAT, whether direct or indirect, in view that LTAT already has statutory control over BHB.”

BHB, as a 59.42%-owned subsidiary of LTAT, is a diversified conglomerate with core businesses spanning across various sectors including plantation, property and industrial, pharmaceutical, heavy industries as well as trading, finance and investment.

For its fourth quarter ended Dec 31, 2022, BHB posted a net loss of RM402.3mil after its 52%-owned subsidiary, Pharmaniaga Bhd, reported a RM552.3mil impairment provision due to slow-moving Covid-19 vaccine inventories.

BHB’s plantation division recorded a reduced pre-tax profit of RM109.9mil, mainly due to lower palm products prices and an increase in estates’ input costs.

This was, however, partly negated by the profit on disposal of land during the quarter.

The company’s trading, finance and investment division posted a higher pre-tax profit of RM88.2mil due to reversal of impairment on property, plant and equipment.

Its property and industrial division incurred a pre-tax loss of RM58.2mil, mainly due to higher share of loss in a joint venture.

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