Saham: KLSE-MPHBCAP - PT. Mphb Capital Berhad

OTHERS [MPHBCAP]

OTHERSMPHB CAPITAL BERHAD ("MPHB" OR "COMPANY")

PROPOSED SELECTIVE CAPITAL REDUCTION AND REPAYMENT EXERCISE OF MPHB PURSUANT TO SECTION 116 OF THE COMPANIES ACT 2016 ("PROPOSED SCR")

Will $MAGNUM / 3859 (MAGNUM BERHAD) become the next privatisation target?

$MAGNUM / 3859 (MAGNUM BERHAD) primarily focuses on its licensed lottery business, including 4-Digit numbers forecast betting and various gaming options. As per its FY23 annual report, the company operated 485 sales outlets across Malaysia, but 14 outlets in Kedah (13) and Perlis (1) were closed due to expired trading licenses.

In FY23, MAGNUM saw a revenue increase of 6.4%, totaling RM2.16 billion, with a 17.9% rise in Profit Before Tax (PBT) to RM188.43 million. Despite this growth, management highlighted industry challenges, notably from illegal operators hindering revenue potential due to lax regulations.

Of note, MAGNUM is also owned by Tan Sri Surin. Given the uncertain business landscape, speculation arises whether it might follow MPHBCAP in privatization.

MAGNUM ranks as the second-largest lottery operator in terms of market capitalization, trailing only $KLSE-SPTOTO. Tan Sri Surin's ownership of 36.714% of the company shares, while substantial, falls short of the majority needed to trigger privatization. Despite no recent announcements of share purchases, it doesn't discount the possibility of MAGNUM becoming his next target.

With a track record of successfully privatizing $MWE / 3921 (MWE HOLDINGS BERHAD), speculation arises regarding MAGNUM's potential. Tan Sri Surin's past criteria for privatization typically involve companies with high Net Tangible Assets (NTA). Comparing examples like MWE, where the NTA was RM2.41 and the privatization price was RM1.75, reflecting a 37.7% discount, and $MPHBCAP / 5237 (MPHB CAPITAL BERHAD), with an NTA of RM2.40 and an offer price of RM1.70 (a 41.2% discount), $MAGNUM / 3859 (MAGNUM BERHAD)'s NTA of RM1.69 suggests a potential privatization offer of RM1.21, yielding a mere 6% upside from the current share price.

However, MAGNUM's NTA may underestimate its true value, given that its assets haven't been evaluated in years, some not for decades, as indicated in its annual report. The untapped value of its stake in U-Mobile fuel speculation among investors about MAGNUM's privatization potential.

Overall, the primary stage of bullish market present the last ripe opportunities for major shareholders to privatize companies inexpensively. Given Tan Sri Surin's ties to MAGNUM and MPHBCAP, delving into their histories unveils intriguing narratives, particularly concerning their past affiliations with MCA as Multi-Purpose entities.

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OTHERS [MPHBCAP]

OTHERSMPHB CAPITAL BERHAD ("MPHB" OR "COMPANY")

PROPOSED SELECTIVE CAPITAL REDUCTION AND REPAYMENT EXERCISE OF MPHB PURSUANT TO SECTION 116 OF THE COMPANIES ACT, 2016 ("PROPOSED SCR")

The Surge of Privatisation

Lately, there has been a resurgence of privatization proposals in the local stock market. Let's delve into three cases and explore the reasons behind this trend in the Malaysian stock market.

📌 $AIRPORT / 5014 (MALAYSIA AIRPORTS HOLDINGS BERHAD) has received a privatization proposal from a consortium led by major shareholder Khazanah Nasional. Despite the offer of RM11 per share, AIRPORT's stock price declined following the announcement due to prior significant gains and concerns about limited upside potential. Criticism towards consortium member GIP, a subsidiary of BlackRock, also raised doubts about the deal. With AIRPORT's stock price currently trading at RM10 and a potential upside of 10%, investors should weigh the risks before considering purchase. In the current bull market, diverse investment opportunities exist beyond those with only a 10% profit potential.

📌 Japanese NTT Data is acquiring $GHLSYS / 0021 (GHL SYSTEMS BERHAD), an electronic payment solutions provider, at RM1.08 per share. GHLSYS' stock price remains steady at RM1.06 to RM1.07 per share, indicating little fluctuation and suggesting the market has high confidence in the success of the privatization. GHLSYS, a promising company once backed by the private equity fund Creador. Once delists, only left $REVENUE / 0200 (REVENUE GROUP BERHAD) and $MPAY / 0156 (MANAGEPAY SYSTEMS BERHAD) remain as its peers in the stock market.

📌 Thai tycoon Tan Sri Surin intends to privatize $MPHBCAP / 5237 (MPHB CAPITAL BERHAD), offering RM1.70 per share to existing shareholders. Given the company's valuable land assets and a net asset value per share of RM2.40, a successful privatization could result in substantial profits for major shareholders.

MPHB Capital gets privatisation offer at RM1.70 per share

PETALING JAYA: MPHB Capital Bhd, via its controlling shareholder Tan Sri Surin Upatkoon, is proposing to take the company private through a selective capital reduction exercise totalling RM748.11mil.

OTHERS [MPHBCAP]

OTHERSMPHB CAPITAL BERHAD (MPHB OR THE COMPANY)
RECEIPT OF AN OFFER FROM CASI MANAGEMENT SDN BHD ON THE PROPOSED SELECTIVE CAPITAL REDUCTION AND REPAYMENT EXERCISE OF MPHB PURSUANT TO SECTION 116 OF THE COMPANIES ACT, 2016