KUALA LUMPUR: Asia Pacific Land Bhd (AP Land) has postponed the adjourned EGM to next Tuesday to seek shareholder approval to sell the company’s assets and liabilities to its major shareholder Low Yat Holdings Sdn Bhd.
The Oct 26 EGM was adjourned to yesterday due to a discrepancy in the company’s circular to shareholders relating to Low Yat’s proposed offer to buy the core business of AP Land for RM305.2 million or 45 sen per share.
Low Yat is the single largest shareholder of AP Land, holding 34% equity interest, and it is leading the management. There was an inconsistency between the AP Land audit committee’s findings and the directors’ recommendation.
The audit committee found the offer price to be a reasonable premium on the last transacted price on Jan 10 but agreed with independent adviser MIDF Amanah Investment Bank Bhd that from a financial point of view the deal is “not fair” due to the large discount on the net assets per share.
The directors’ recommendation, however, stated that the board (save for the interested directors) was of the opinion that the proposed disposal is “fair and reasonable and in the best interests of AP Land and its non-interested shareholders”.
After the meeting was adjourned, AP Land informed Bursa Malaysia later on the same day that the board had told shareholders at the meeting that it was of the opinion the offer by Low Yat was “not fair but reasonable” after taking into account the advice of Maybank Investment Bank Bhd.
The offer was at an 8% premium to AP Land’s closing price of 41.5 sen before the announcement on the proposed offer, and a 57% discount to the adjusted audited net assets per share of RM1.04 as at Dec 31, 2010.
The Minority Shareholder Watchdog Group told the media earlier that the discrepancy was material and could influence the voting on the proposed divestment.
Some minorities find the offer price of 45 sen per share way too low compared with AP Land’s net assets per share of RM1.04. Furthermore, some quarters pointed out the company’s landbank in Rawang could soon appreciate in value in view of the government’s mass rapid transit project, which is expected to improve the accessibility from the city centre to the suburban areas in the Klang Valley.
According to property valuer Khong & Jaafar, the undeveloped parcel of land in Rawang is worth RM349.2 million, compared with Low Yat’s offer price of RM305.2 million for all the assets in AP Land including plots of land in Penang, China and Japan as well as plantations.
On the flip side, if the minorities were to hold onto their shares in AP Land, there is no certainty the company’s share price would ever climb above RM1.
Some see this as a opportune time to exit, considering AP Land shares have mostly been trading below 40 sen since 2008.
In terms of financials, AP Land has been loss-making since FY09 ended Dec 31. Its net loss widened to RM5.79 million for the 6MFY11 ended June 30 from RM1.25 million in the previous corresponding period. Revenue shrunk substantially to RM44.4 million from RM62.2 million.
A point to ponder is that Low Yat, which has run the company for decades, is keen to buy out the asset rich but loss-making business now.
This article appeared in The Edge Financial Daily, November 9, 2011.
The Oct 26 EGM was adjourned to yesterday due to a discrepancy in the company’s circular to shareholders relating to Low Yat’s proposed offer to buy the core business of AP Land for RM305.2 million or 45 sen per share.
Low Yat is the single largest shareholder of AP Land, holding 34% equity interest, and it is leading the management. There was an inconsistency between the AP Land audit committee’s findings and the directors’ recommendation.
The audit committee found the offer price to be a reasonable premium on the last transacted price on Jan 10 but agreed with independent adviser MIDF Amanah Investment Bank Bhd that from a financial point of view the deal is “not fair” due to the large discount on the net assets per share.
The directors’ recommendation, however, stated that the board (save for the interested directors) was of the opinion that the proposed disposal is “fair and reasonable and in the best interests of AP Land and its non-interested shareholders”.
After the meeting was adjourned, AP Land informed Bursa Malaysia later on the same day that the board had told shareholders at the meeting that it was of the opinion the offer by Low Yat was “not fair but reasonable” after taking into account the advice of Maybank Investment Bank Bhd.
The offer was at an 8% premium to AP Land’s closing price of 41.5 sen before the announcement on the proposed offer, and a 57% discount to the adjusted audited net assets per share of RM1.04 as at Dec 31, 2010.
The Minority Shareholder Watchdog Group told the media earlier that the discrepancy was material and could influence the voting on the proposed divestment.
Some minorities find the offer price of 45 sen per share way too low compared with AP Land’s net assets per share of RM1.04. Furthermore, some quarters pointed out the company’s landbank in Rawang could soon appreciate in value in view of the government’s mass rapid transit project, which is expected to improve the accessibility from the city centre to the suburban areas in the Klang Valley.
According to property valuer Khong & Jaafar, the undeveloped parcel of land in Rawang is worth RM349.2 million, compared with Low Yat’s offer price of RM305.2 million for all the assets in AP Land including plots of land in Penang, China and Japan as well as plantations.
On the flip side, if the minorities were to hold onto their shares in AP Land, there is no certainty the company’s share price would ever climb above RM1.
Some see this as a opportune time to exit, considering AP Land shares have mostly been trading below 40 sen since 2008.
In terms of financials, AP Land has been loss-making since FY09 ended Dec 31. Its net loss widened to RM5.79 million for the 6MFY11 ended June 30 from RM1.25 million in the previous corresponding period. Revenue shrunk substantially to RM44.4 million from RM62.2 million.
A point to ponder is that Low Yat, which has run the company for decades, is keen to buy out the asset rich but loss-making business now.
This article appeared in The Edge Financial Daily, November 9, 2011.
