KUALA LUMPUR (May 20): Batu Kawan Bhd (KL:BKAWAN) is believed to be taking over property developer MKH Bhd (KL:MKH) and its subsidiary MKH Oil Palm (East Kalimantan) Bhd (KL:MKHOP) that are both controlled by Chen Choy & Sons Realty Sdn Bhd.
However, details of the corporate exercise — such as whether it involves a share swap or cash offer — were unclear at the time of writing.
Some in the market believe that Batu Kawan may undertake a mandatory general offer for the remaining shares in MKH. The offer price is understood to be as high as RM2 per share, sources said.
It remains unclear whether the intention is to take MKH private.
Through the proposed deal, Batu Kawan is expected to gain control of MKH’s property assets, and its plantation business via 65.3%-owned subsidiary MKH Oil Palm. Chen Choy & Sons Realty also directly owns a 3% stake in MKH Oil Palm.
Chen Choy & Sons Realty, the private vehicle of the Chen family, has direct and indirect interest of 17.81% and 23.153% respectively in MKH. Other members of the Chen family have stakes in MKH, with the indirect interest reaching up to over 40%.
Trading in the shares of MKH, MKH Oil Palm and Batu Kawan was suspended on Tuesday pending material announcements by the companies.
The corporate exercise comes amid a sharp rise in MKH shares, which have surged more than 90% over the past four trading sessions. Based on its last traded price of RM1.66, the group was valued at RM973.67 million.
As at end-2025, MKH’s net asset value per share stood at RM3.25. Its largest assets are held via Suria Villa Sdn Bhd, which owns about 138 acres of land in Semenyih with a carrying value of RM267.09 million, and Srijang Kemajuan Sdn Bhd, which holds approximately 225 acres in Kajang valued at RM182.23 million.
The group was also in a net cash position then, with cash and bank balances of RM680.15 million against long-term borrowings of RM401.32 million and short-term loans of RM100.1 million.
Shares of MKH Oil Palm also climbed recently, rising from 60 sen to as high as 72 sen last Friday before easing to 66 sen at the latest close, giving the company a market capitalisation of RM675.57 million. Its net asset value per share stood at 55 sen as at end-2025.
MKH Oil Palm owns 18,205 hectares of plantation estates in East Kalimantan, Indonesia. Its key assets include PT Maju Kalimantan Hadapan, valued at RM182.09 million, and PT Sawit Prima Sakti, valued at RM88.27 million.
MKH’s earnings have been on an upward trajectory over the past three financial years ended Sept 30. Net profit rose to RM112.86 million in FY2025 from RM101.9 million in FY2024 and RM81.27 million in FY2023. Revenue, however, eased to RM953.27 million in FY2025 from RM1.06 billion in both FY2024 and FY2023.
Meanwhile, stronger crude palm oil prices boosted MKH Oil Palm’s earnings, with FY2025 net profit surging to RM79.78 million from RM63.56 million in FY2024 and RM30.14 million in FY2023.
Batu Kawan last closed at RM20.88, giving it a market capitalisation of RM8.34 billion. The stock has gained 7.1% year to date. In terms of balance sheet strength, as at March 31, the group was in a net debt position, with cash holdings of RM2.49 billion against long-term debt of RM6.95 billion and short-term borrowings of RM5.47 billion.