GuocoLand said the proposed privatisation gives shareholders of GuocoLand (Malaysia) an opportunity to exit at a premium over the market price. (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Singapore-listed real estate investment and development group GuocoLand Limited is looking to privatise Kuala Lumpur-listed GuocoLand (Malaysia) Berhad (GLM), according to bourse announcements filed on Feb 3.
Entitled shareholders of GLM will receive RM1.10 (about $0.35) in cash per ordinary share, under the proposed privatisation.
GuocoLand’s wholly-owned subsidiary, GLL (Malaysia) Pte Ltd, currently owns 65.03% of GLM, which is listed on Bursa Malaysia Securities. Meanwhile, a nearly 3% stake is held by Malaysian tycoon Quek Leng Chan, who is chairman of GuocoLand, Hong Leong Financial Group Berhad and Hong Leong Bank Berhad. Together, they own about 67.93% of all GLM shares in issue.
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GLL (Malaysia) has submitted a formal proposal to take GLM private by way of a selective capital reduction and repayment exercise.
The offer price of RM1.10 for each share is at a 17.65% premium to GLM’s last traded price of RM0.9350 as of Jan 30, and a 47.73% premium to its six-month volume-weighted average market price of RM0.7446.
The total capital repayment will be about RM269.4 million (about $86.9 million), based on the nearly 245 million shares — or a 34.97% stake — that are not held by GLL (Malaysia).
It will be funded using any excess funds in GLM, and the balance will be financed by advances and/or equity injection from GLL (Malaysia) and/or GuocoLand.
This provides an opportunity for GLM shareholders to exit and realise their holdings in cash expeditiously at a premium over the market price, which may otherwise be difficult given the low trading liquidity of GLM shares, GuocoLand said in a bourse filing.
Further, it will also give the GLM group greater flexibility to manage its business, enabling them to “create a more streamlined operating structure and improve the utilisation of resources”, the Singapore developer added.
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The board of directors at GLM will have until Mar 2 to make a decision on whether it will implement the proposed privatisation and table it for shareholders’ consideration.
The proposed privatisation will result in GLL (Malaysia) becoming the sole shareholder of GLM, and GLM will become an indirect wholly-owned subsidiary of Singapore-listed GuocoLand.
GLM will be delisted from Bursa Securities after the proposed privatisation is complete.