Batu Kawan crosses MKH takeover threshold for delisting from Bursa Malaysia

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Batu Kawan crosses MKH takeover threshold

Highlights

Batu Kawan, Whitmore Holdings and related parties hold 95% of MKH shares, or 548.85 million units, qualifying for compulsory acquisition and delisting.
Batu Kawan's RM2-per-share offer for MKH is deemed unfair but reasonable, with the privatisation value reaching RM1.15 billion; the offer remains open until 8 Oct.
MKH shares will be suspended from trading five days after 8 Oct before delisting, while Batu Kawan intends to retain MKH Oil Palm's listing.

This article was translated from the original. Read the original version by our correspondent here.

Offer status and delisting steps

As reported by The Edge Malaysia, citing a statement issued on their behalf by Maybank Investment Bank Bhd, the 95% threshold was reached when Batu Kawan, Whitmore Holdings and persons acting in concert held 548.85 million MKH shares at Wednesday's market close.

With valid acceptances of at least nine-tenths of the nominal value of the offer shares, Batu Kawan and Whitmore will invoke Section 222(1) of the Capital Markets and Services Act 2007 to compulsorily acquire the remaining MKH shares from dissenting shareholders. The offer remains open until 8 Oct, after being extended from the original closing date of 17 Sept.

Bursa Malaysia Securities will suspend trading in MKH shares after the expiry of five market days from 8 Oct. Thereafter, Batu Kawan and Whitmore will procure that MKH takes the necessary steps to withdraw its listing status from Bursa Malaysia.

Impact on shareholders and transaction structure

Two weeks ago, minority shareholders of MKH and its separately listed plantation unit, MKH Oil Palm (East Kalimantan) Bhd, received differing recommendations regarding Batu Kawan's two takeover offers. Kenanga Investment Bank Bhd, MKH's appointed independent adviser, described the RM2-per-share cash offer as unfair but reasonable, stating that the price undervalued the developer's fair asset value.

For MKH Oil Palm, Mainstreet Advisers Sdn Bhd urged shareholders to reject the related 66.26 sen-per-share acquisition offer, describing it as unfair and unreasonable. Mainstreet stressed that the offer represented a 47% discount to MKH Oil Palm's net asset value, while noting that Batu Kawan intends to retain the plantation unit's listing.

The takeover began in May when Batu Kawan, through Whitmore, agreed to acquire a combined 47.7% stake in MKH from members of the Chen family for RM549.8 million, or RM2 per share. The RM2 offer puts the total cost of privatising MKH at up to RM1.15 billion, including the purchase of the initial stake.

Batu Kawan shares closed unchanged at RM20.52 on Wednesday, giving it a market capitalisation of RM8.2 billion. MKH was also unchanged at RM1.99, with a market value of RM1.17 billion, while MKH Oil Palm closed unchanged at 64.5 sen, valuing the group at RM660 million.

In our earlier report on corporate updates on Bursa Malaysia, we compiled several key announcements involving financial results, new contracts and corporate actions across various sectors. Highlights included UMS Integration's plan to raise up to RM450 million through a share placement to fund automation and capacity expansion in Penang, as well as operational expansion in Vietnam and Singapore.

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