All eyes will be on MMC Corp Bhd’s extraordinary general meeting (EGM) on Thursday (Sept 30), when shareholders will vote on Tan Sri Syed Mokhtar Albukhary’s proposal to privatise the business via a selective capital reduction (SCR) at RM2 per share.
MMC’s share price recovered 20 sen or 12.12 percent in the last three days, closing at RM1.85 on Wednesday. The closing price remains 7.5% below the RM2 offer price. In comparison to its last trading price of RM1.30 on June 3, the counter has gained 42.31 percent. Year to date, its shares are up 107.87 percent.
On June 3, Syed Mokhtar launched the exercise for the remaining 48.24 percent ownership in MMC through his private vehicle Seaport Terminal (Johore) Sdn Bhd (STJSB). STJSB owns a controlling 51.76 percent stake in MMC. This would cost the tycoon RM2.94 billion.
With 3.05 billion outstanding shares, MMC is valued RM5.6 billion at Wednesday’s closing price of RM1.85.
According to STJSB, the SCR was implemented to provide MMC with greater flexibility in operating and developing its present business while also exploring new prospects free of regulatory constraints and compliance expenses connected with its listed position.
The Edge reported on Monday (Sept 27) that Permodalan Nasional Bhd (PNB) is the primary decision-maker in the privatisation of MMC. PNB owns a 20.97 percent share in the firm. This is because, under the SCR, the deal must be approved by at least 75% of shareholders present and voting, with no more than 10% voting against it.
“Historically, PNB has not opposed Syed Mokthar’s asset injection into MMC,” the audit stated.
Apart from PNB, the audit revealed that the remaining shares were primarily held by funds. Apart from PNB, the Employees Provident Fund had the most shares at 1.77 percent.
Earlier this month, its independent adviser Alliance Investment Bank Bhd declared the planned SCR “unfair,” citing the offer price of RM2 per share as being less than the projected value of between RM3.32 and RM3.41.
The adviser, however, believes the proposal is “fair” because MMC shares had not traded above the offer price in three years before to the announcement on June 3. In the time under review, the highest open market price was RM1.55 in July 2018, while the lowest was 46.5 sen in March this year.
MMC Corp is valued at RM6.08 billion by the SCR at RM2 per share. Alliance placed the company’s value at between RM10.1 billion and RM10.37 billion based on its projected value of MMC shares.
MMC’s primary sectors of operation include ports and logistics, energy and utilities, as well as engineering and industrial development. It owns 38.45% of Malakoff Sdn Bhd. It is the parent company of Pelabuhan Tanjung Pelepas Sdn Bhd, Johor Port Sdn Bhd, Northport (Malaysia) Sdn Bhd, Penang Port Sdn Bhd, and Tanjung Bruas Port Sdn Bhd, as well as logistics operator Kontena Nasional Sdn Bhd and Senai Airport Terminal Services Sdn Bhd, which operates Senai International Airport in Johor and Kertih
Published by Zack Baharum