KUALA LUMPUR (July 15): CTOS Digital Bhd has proposed to buy a 19.9% stake in RAM Holdings Bhd from Creador’s Oscar Matrix Sdn Bhd for RM51.3 million or RM25.80 per share.

The acquisition, which is expected to be completed by the third quarter of this year, will raise CTOS’ shareholding in RAM to 39.1% or 3.91 million shares, the credit reporting agency said in a filing with Bursa Malaysia.

Oscar Matrix’s original cost of investment in RAM was  RM29.6 million, or RM14.88 a share, between May and August 2019.

CTOS had previously spent RM49.6 million or an average of RM25.82 per share to buy 1.92 million shares or a 19.2% stake in RAM between July 2021 and May this year from CIMB Bank Bhd, Standard Chartered Bank Malaysia Bhd, OCBC Bank (Malaysia) Bhd, Affin Bank Bhd, Affin Hwang Investment Bank Bhd and Alliance Investment Bank Bhd.

Creador also owns a 30.39% stake in CTOS as of July 4.

CTOS on Friday said the purchase consideration represents a price-to-earnings ratio of about 18.2 times and price-to-book ratio of 1.5 times.

Meanwhile, CTOS has also proposed to buy up to an additional 3.087 million shares or a 30.9% stake in RAM at a price not more than RM28.50 per share or up to RM88 million over a period of 12 months.

CTOS, which was listed on the Main Market of Bursa Malaysia in July last year, said it is in discussions with potential sellers for this acquisition but has yet to enter into any definitive agreement.

The acquisition price of RM28.50 per share is about 10.5% higher than the offer made for Creador’s block of shares in RAM. At RM28.50 per share, RAM appeared to be valued at about RM284.77 million based on a back-of-the-envelope calculation.

CTOS said if it manages to buy up this additional 30.9% stake, it may hold up to seven million shares or a 70% stake in RAM.

CTOS first emerged as RAM’s shareholder in July 2021 after it bought a 4.6% stake or 462,500 shares from CIMB Bank Bhd for RM10.1 million, which works out to be RM21.74 per share, valuing RAM at about RM217.4 million at that time.

Apart from CTOS and Creador’s Oscar Matrix, RAM’s other substantial shareholders include Tunku Ali Redhauddin Tuanku Muhriz’s vehicle Dragonline Solutions Sdn Bhd (15.65%), Hong Leong Bank Bhd (5.8%), Public Bank Bhd (5.33%) and S&P Global Asian Holdings Pte Ltd (19.2%).

In a separate filing, CTOS said it plans to seek its shareholders' approval to buy back shares of the company at the forthcoming EGM.

Through this share buyback programme, CTOS intends to repurchase a total of 231 million shares — equivalent to 10% of its total issued shares of 2.31 billion as at March 31.

CTOS shares closed three sen or 2.56% higher at RM1.20 on Friday (July 15), giving the company a market capitalisation of RM2.77 billion. The stock has fallen 33.4% year to date.