KUALA LUMPUR (Sept 8): CTOS Digital Bhd is set to be the majority shareholder in RAM Holdings Bhd with a 55.88% equity interest after buying out the stakes of two shareholders totalling 16.45% for RM46.88 million.
The credit reporting group said it has entered into agreements to buy a 15.65% stake in RAM for RM44.6 million from Dragonline Solutions Sdn Bhd, and another 0.8% stake for RM2.28 million from Deutsche Bank (Malaysia) Bhd.
The price was arrived at based on a willing buyer, willing seller basis after taking into consideration that it represents 1.6 times RAM’s financial year 2021 (FY21) net asset value and 20.1 times FY21 profit after tax, in-line with the other listed credit rating agencies globally.
“In consequence of the aforementioned acquisitions from Deutsche and Dragonline, CTOS’ equity interest in RAM will increase from 39.13% to 55.58%," said CTOS in a filing with Bursa Malaysia.
“This will allow both companies to leverage each company’s expertise in credit assessment, data and analytics to further extend their product offering and value proposition to their existing customer base,” it added.
CTOS said the acquisitions, to be funded by bank borrowings, are not subject to the approval of its shareholders or any other relevant regulatory authorities, and are expected to be completed by the end of September.
It said the Securities Commission had on April 28 given its approval for CTOS to acquire majority stakes in RAM within six months.
Additionally, CTOS shareholders had at an extraordinary general meeting on Aug 25 approved the proposed potential acquisition of up to an additional 3.09 million shares (representing an equity interest of about 30.9%) in RAM at not more than RM28.50 per share or a total of up to RM88 million over a period of 12 months.
Tunku Ali Redhauddin Tuanku Muhriz is listed as Dragonline’s director and substantial shareholder.
Deutsche’s substantial shareholder is Deutsche Bank AG, and its directors comprise Tunku Datuk Mahmood Fawzy Tunku Muhiyiddin, Datuk Yusof Annuar Yaacob, Koid Swee Lian, Chong Kin Leong and Seamus Toal.
CTOS’ shares finished unchanged at RM1.42, bringing it a market capitalization of RM3.28 billion.
Listed on the Main Market on July 19 last year, the stock has slipped 21.55% year to date.