KUALA LUMPUR (April 14): Permodalan Nasional Bhd (PNB) will see the merger of both its property investments, SP Setia Bhd and I&P Group Sdn Bhd, to form one of the largest property company in Malaysia with a landbank of close to 10,000 acres.

Today, SP Setia, PNB and Amanahraya Trustees Bhd (as trustee for Amanah Saham Bumiputera) entered into a non-binding memorandum of intent to commence negotiations on the proposed acquisition by SP Setia of the entire equity interest in I&P Group, which has 4,263 acres of landbank, for an indicative price within the range of RM3.5 billion to RM3.75 billion.

During the press conference held in Setia International Centre, SP Setia president and chief executive officer Datuk Khor Chap Jen said the proposed acquisition will enhance the group's landbank and fast track its expansion plan.

"We are truly excited with this corporate exercise embarked upon by our group. We believe that the acquisition of I&P Group will allow us to tap the synergistic opportunities that I&P Group could offer given that its landbanks are located within the growth areas in the central part of Klang Valley and Johor Bahru, where our company has charted successes and are a stronghold of its 'Setia' brand. The synergy between SP Setia and I&P Group is obvious.

"Further, based on information disclosed, I&P Group has a strong balance sheet, with very low debt level, which is an excellent platform to facilitate future growth and execution," Khor said.

SP Setia also entered into a conditional sale and purchase agreement to acquire a parcel of land, measuring 342.5 acres, located in Bangi, Selangor, known as Bangi Estate from Seriemas Development Sdn Bhd, a subsidiary of PNB.

SP Setia was suspended from the trading today pending the release of this corporate exercise's announcement. It was last traded at RM3.55, a gain of 13.4% year to date, giving it a market capitalisation of RM10.1 billion.