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Major shareholder offer to acquire Kurnia Setia for RM270 million

Posted on: June 7, 2009


Bernama – Saturday, June 6

KUALA LUMPUR, June 5 (Bernama) — The owners of Pahang-based oil palm company, Kurnia Setia Bhd (KSB) have made an offer to acquire the entire business, including all assets and liabilities of KSB for RM270 million in cash.

TAS Group comprising TAS Kurnia Sdn Bhd (TKSB), TAS Industries Sdn Bhd as well as individuals related to TKSB collectively own 30.5 percent stake in KSB while Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang (LKPP) has 22.8 percent while the remaining shares are held by the public.

KSB in a statement, said the offer was made via Kreatif Selaras Sdn Bhd (KSSB), a special purpose private limited company incorporated for the purpose of acquisition.

KSSB’s chairman, Tengku Tan Sri Meriam Sultan Ahmad Shah said the acquisition will result in KSSB having 100 percent control over the assets of KSB.

“Upon completion of the acquisition, KSSB shall own the entire issued and paid-up share capital of KSB and notification shall be made to Bursa Securities to de-list KSB from the exchange,” she said.

Following the exercise, KSB should carry out a capital repayment to all the shareholders by way of cancellation of its shares in issue, which would see them receiving cash of RM2.40 per KSB shares while warrant holders would get cash of 90 sen per warrant.

The purchase consideration was based on the outstanding securities of KSB as at today whereby there are 101.494 million outstanding KSB shares and 1.832 million outstanding options under KSB’s employee share option scheme.

This would translate into a total cash of RM247.982 million.

Meanwhile, there were 24.595 million outstanding warrants that would translate to a cash of RM22.135 million assuming none of the warrant holders exercise their warrants between now and the acquisition completion date.

KSB warrants were listed on April 25, 2008 with a 10-year exercise/conversion period maturing April 20, 2018. The warrants were issued free to subscribers of KSB rights shares on the basis of one free detachable warrant for ever rights share subscribed.

Each warrant is entitled to one KSB share at the exercise price of RM1.50 per share.

Trading of KSB shares has been suspended from the afternoon of June 3. It closed at RM2.20 per share while KSB warrants closed at 89 per share.

The share price has been historically trading at average price earnings (PE)multiples of between 4.52 to 5.85 times for the past two years, which is lower than the average industry PE of 10.29 times over the past year. — BERNAMA

FAY SD

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