Mwe Holdings Berhad

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.

$MPHBCAP / 5237 (MPHB CAPITAL BERHAD): Privatization in Progress

Background:

- MPHBCAP has received a privatization proposal at RM1.70 per share from its primary stakeholder, Tan Sri Surin Upatkoon.
- Upatkoon intends to delist the company through a selective capital reduction amounting to RM748.11 million, opting out of maintaining its listing status.
- Presently, Upatkoon and his family collectively hold a 43% stake in MPHB.
- Additionally, Upatkoon is a major shareholder of $MAGNUM / 3859 (MAGNUM BERHAD).

Likelihood of Success:

- Drawing from past events, Upatkoon successfully privatized $MWE / 3921 (MWE HOLDINGS BERHAD) in 2018 using a similar method, involving a selective capital reduction and a corresponding cash repayment of RM1.75 per share.
- However, it's notable that Upatkoon's first attempt to privatize MWE in 2015, offering RM1.70 per share, was unsuccessful.
- Comparing the current situation with MWE's privatization, where the company's net tangible assets (NTA) were RM2.40 and the privatization price was RM1.70, representing a 41% discount, investors might be wary of a similar outcome.
- Considering the previous privatization of MWE, where the NTA was RM2.41 and the privatization offer was RM1.75, it appears that the market is showing some skepticism, possibly anticipating a higher offer from Upatkoon.

Valuation:

The current share price of RM1.62 versus the privatization offer of RM1.70 translates to only a 4.9% discount. When factoring in brokerage fees and other expenses, the attractiveness diminishes.

[This is not a recommendation to buy or sell, but solely for educational purposes.]

MWE HOLDINGS BERHAD ("MWE" OR "COMPANY")

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

MWE HOLDINGS BERHAD ("MWE" OR "COMPANY")

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

MWE HOLDINGS BERHAD ("MWE" OR "COMPANY")

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

KUALA LUMPUR (Sept 13): Trading of MWE Holdings Bhd shares will be suspended on Thursday (September 20, 2018) to facilitate the implementation of the diversified company's selective capital reduction and repayment (SCR) exercise.
"Your attention is also drawn to MWE's announcement dated 6 September 2018 and notice to shareholders dated 7 September 2018 respectively," MWE said in a a filing with Bursa Malaysia today.

MWE HOLDINGS BERHAD ("MWE" OR "COMPANY")

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

24/8/2018 Latest Quarter Report
$MEXTER / 0075 (MEXTER TECHNOLOGY BERHAD) $KLSE-KAM$OPCOM / 0035 (OPCOM HOLDINGS BERHAD) $HEVEA / 5095 (HEVEABOARD BERHAD) $CMSB / 2852 (CAHYA MATA SARAWAK BERHAD) $PARLO $HEXZA / 3298 (HEXZA CORPORATION BERHAD) $JFTECH / 0146 (JF TECHNOLOGY BERHAD)$SUNZEN / 0148 (SUNZEN BIOTECH BERHAD) $THRIVEN / 7889 (THRIVEN GLOBAL BERHAD) $CENTURY / 7117 (CENTURY LOGISTICS HOLDINGS BERHAD) $MGRC / 0155 (MALAYSIAN GENOMICS RESOURCE CENTRE BERHAD) $EVERGRN / 5101 (EVERGREEN FIBREBOARD BERHAD) $DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) $MMCCORP / 2194 (MMC CORPORATION BERHAD) $CHEETAH / 7209 (CHEETAH HOLDINGS BERHAD) $G3 / 7184 (G3 GLOBAL BERHAD) $TEKSENG / 7200 (TEK SENG HOLDINGS BERHAD) $MASTER / 7029 (MASTER-PACK GROUP BERHAD) $SUMATEC / 1201 (SUMATEC RESOURCES BERHAD) $MAGNUM / 3859 (MAGNUM BERHAD) $STRAITS / 0080 (STRAITS INTER LOGISTICS BERHAD) $SKPRES / 7155 (SKP RESOURCES BHD) $AIM / 0122 (ADVANCE INFORMATION MARKETING BERHAD) $LIENHOE / 3573 (LIEN HOE CORPORATION BERHAD) $HLT / 0188 (HLT GLOBAL BERHAD) $MQTECH / 0070 (MQ TECHNOLOGY BERHAD) $KOBAY / 6971 (KOBAY TECHNOLOGY BERHAD) $NPC / 5047 (NPC RESOURCES BERHAD) $IBRACO / 5084 (IBRACO BERHAD) $AXIATA / 6888 (AXIATA GROUP BERHAD) $SCOMIES / 7045 (SCOMI ENERGY SERVICES BHD) $MERCURY / 8192 (MERCURY INDUSTRIES BERHAD) $GRANFLO / 0056 (GRAND-FLO BERHAD) $MSM / 5202 (MSM MALAYSIA HOLDINGS BERHAD) $DSONIC / 5216 (DATASONIC GROUP BERHAD) $MWE / 3921 (MWE HOLDINGS BERHAD)

MWE HOLDINGS BERHAD ("MWE" or "the Company")
DATE OF ANNUAL GENERAL MEETING RECORD OF DEPOSITORS

MWE HOLDINGS BERHAD ("MWE" OR "COMPANY")

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