KUALA LUMPUR: Batu Kawan Bhd
is acquiring a combined 47.7% stake in MKH Bhd for RM549.8mil, a move that will trigger a mandatory takeover offer (MO) and potentially lead to the privatisation of the property and plantation group.
In a filing with Bursa Malaysia, Batu Kawan said its wholly owned subsidiary, Whitmore Holdings Sdn Bhd, had entered into agreements to acquire a 29.6% stake in MKH for RM340.9mil cash, or RM2 per share.
Whitmore also agreed to acquire a 3.9% stake in MKH Oil Palm (East Kalimantan) Bhd (MKHOP) for RM25.4mil cash, or 64.78 sen per share.
In addition, Whitmore also proposed to acquire another 18.1% stake in MKH for RM208.9mil cash, also at RM2 per share.
Upon completion of the acquisitions, the direct shareholding of the offeror will increase from nil to 29.6% in MKH (excluding treasury shares) and from nil to 3.9% in MKHOP (excluding treasury shares), respectively.
Following the proposed acquisition, Whitmore’s stake in MKH would rise to 47.7%, triggering a MO for all remaining MKH shares not already owned by Batu Kawan, Whitmore and persons acting in concert (PACs) with them.
“The offeror will be obliged to extend the proposed MO where the MKH offer price would be the same price per MKH share pursuant to the proposed MKH acquisition,” Batu Kawan said.
The RM2 offer price represented a 20.48% premium to MKH’s last traded price of RM1.66 on May 19, and a premium of between 37.34% and 57.22% over its five-day to 12-month volume weighted average prices.
Batu Kawan said the acquisitions and proposed offers would broaden the group’s earnings base and operational scale, leveraging MKH’s property development business and plantation assets in East Kalimantan, Indonesia.
“The enlarged Batu Kawan Group will, subject to Batu Kawan’s shareholders’ approval, be able to pursue synergistic initiatives aimed at achieving greater economies of scale, cost synergistic benefits through savings on capital and operational expenditure, access to a larger pool of talent and expertise and adoption of best practices currently used by each group,” it said.
Batu Kawan said it may leverage on the MKH Group’s landbank, project management capabilities and construction ecosystem to unlock value for future development opportunities.
“Further, the addition of the MKH Group’s plantation estates would enlarge the Batu Kawan Group’s plantation footprint within East Kalimantan, Indonesia and enable operational synergies through the sharing of agronomic expertise, sustainability practices and supply chain efficiencies alongside the Batu Kawan Group’s existing plantation operations,” it said.
Upon completion of the acquisitions and assuming full acceptance of the MO, Batu Kawan said the enlarged group would have a pro forma revenue of RM26.81bil and profit before taxation of RM1.82bil.
The proposals will be funded via internally generated funds and bank borrowings.
Batu Kawan said if it and its PACs eventually hold 90% or more of MKH shares following the offer, it does not intend to maintain MKH’s listing status on the Main Market of Bursa Malaysia.
The group expects the proposals to be completed in the second half of 2026.
