This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025

WHILE questions remain about the prospects of Boustead Plantations Bhd (BPlant), one thing for sure is that the minority shareholders had a good exit via the privatisation exercise at an offer price of RM1.55 per share.

The offer price was 19.2% above BPlant’s net tangible asset (NTA) per share.

BPlant’s share price jumped 142% in two months to a record high of RM1.49 before the first takeover bid was made, as investors got the wind of a possible corporate restructuring exercise. Excluding the sharp rise, the plantation group’s five-year average price stood at 59.2 sen between May 31, 2018 and May 31, 2023, while the 10-year average was 55.9 sen.

Using the average prices as the yardstick, the privatisation offered long-term minority shareholders a good exit from BPlant, which needs to spend heavily on replanting,  with handsome returns.

It was a boon for the minority shareholders considering that from the time the plantation stock was listed in 2014, it had not traded above the RM1 level until July 2023.

The privatisation of BPlant was first initiated by Kuala Lumpur Kepong Bhd (KL:KLK) and the Armed Forces Fund Board (LTAT) in late August 2023 at RM1.55 per share.

The privatisation exercise came about after KLK bought a 33% stake in BPlant for RM1.15 billion cash. The proposal was for KLK to control 65% of BPlant, and for Boustead Holdings Bhd to keep a 35% stake.

The deal was scuttled due to political rumblings, despite KLK’s proven track record as an efficient plantation group.

Consequently, LTAT had to proceed with the takeover bid without a partner. LTAT, together with its wholly-owned unit Boustead Holdings, collectively held a 68% stake in BPlant then. The takeover exercise cost the armed forces fund roughly RM1.11 billion to buy out the remaining 32% stake that it did not own.

In October 2023, former defence minister Datuk Seri Mohamad Hasan indicated that the government would provide a financial guarantee of RM2 billion to LTAT to buy out BPlant.

Independent adviser Malacca Securities said the takeover offer price of RM1.55 for BPlant by LTAT was “not fair” but “reasonable” and recommended that shareholders accept the offer. Its recommendation was premised on the historical traded price of BPlant shares since its listing on the Main Market of Bursa Securities on June 26, 2014, up to Nov 10, 2023.

Payment service provider GHL Systems Bhd was officially delisted from the Main Market of Bursa Malaysia on Aug 6, 2024, following a successful privatisation by global technology firm NTT Data Japan Corp (NTTD Japan) for RM1.2 billion.

NTTD Japan made the takeover offer in May after acquiring a 58.73% stake in GHL for RM724.08 million, or RM1.08 per share.

The controlling stake was acquired on May 29 from London-based private equity firm Actis Stark (Mauritius) Ltd, UK-based APIS Growth 14 Ltd, GHL vice-chairman Simon Loh Wee Hian and his investment vehicle Tobikiri Capital Ltd.

As GHL has a total of 1.14 billion shares issued, NTTD Japan was estimated to have forked out an additional RM508.74 million to fully control GHL.

The offer price for the company provided a 34.5% premium over GHL’s one-year volume-weighted average market price at the time.

Independent adviser Affin Hwang Investment Bank had recommended that GHL shareholders accept NTTD Japan’s offer, describing it as “fair and reasonable”.

The offer was fair due to the premium on valuation based on enterprise multiple and historical market prices, while it was also reasonable due to the relatively lower liquidity, absence of counteroffer and the delisting plan for GHL, it noted.

NTTD Japan is a subsidiary of Nippon Telegraph and Telephone Corp, the Japanese telecommunications giant also known as NTT.

Eventually, NTTD Japan secured 98.8% of GHL shares at the close of the takeover offer on July 23. As a result, the Japanese firm was allowed to compulsorily acquire the rest of the shares not owned. The compulsory acquisition was completed on Sept 5, whereby GHL became a wholly owned unit of NTTD Japan.

GHL was first listed on Mesdaq (now known as the ACE Market) in 2003, before transferring to the Main Market in 2007. The counter was last traded at RM1.08, giving it a market capitalisation of RM1.23 billion.

GHL’s core operation is its third-party acquiring business, also known as transaction payment acquisition. It has a reach that spans across six countries: Malaysia, the Philippines, Thailand, Indonesia, Singapore and Australia.

The company acquires merchants to facilitate their acceptance of e-payments and transactions via its terminals through its partnership with global schemes, card payment acquirers, e-wallet issuers, telcos and billers.

CIMB acted as the principal adviser to NTTD Japan for the deal. Corporate observers had pointed out that the transaction was expected to meaningfully strengthen NTTD Japan’s position in the payment market in Southeast Asia, especially in Malaysia, the Philippines and Thailand.

The privatisation of GHL also fits well with NTTD Japan’s long-term strategy as it seeks to accelerate its expansion in Asia-Pacific while strengthening its market position in Malaysia. 

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