This article first appeared in The Edge Malaysia Weekly on June 22, 2026 - June 28, 2026

IN a move to realign its string of assets, Berjaya Corp Bhd (BCorp) (KL:BJCORP) is said to be mulling the sale of its 30% stake in Berjaya Sompo Insurance Bhd.

Sources say local and international investment banks have been told to look into the matter, with BCorp seeking a valuation of as much as 1.5 times Berjaya Sompo’s book value.

“Given the highly supervised nature of the insurance business and the requirement to fulfil the local shareholding, the bankers are looking at prospective suitors who are long term in their investment mandate. It’s only preliminary because the deal would require regulatory approvals even before negotiations can start,” says a source.

Berjaya Sompo is one of the larger general insurance companies in Malaysia. It has a fairly decent market share of the business, generating profits of an average of RM180 million per year. In its unaudited results for the six months ended June 30, 2025, it recorded a profit of RM98.8 million on revenue of RM657 million.

Equity attributable to owners was RM1.38 billion, including retained reserves of RM1.26 billion.

A 30% stake at book value would come to an estimated RM414 million while the block would be worth about RM621 million if valued at 1.5 times book.

“The general insurance transactions can be as low as 0.5 times book and as high as 2.5 times book, depending on the business. If the general insurer is tied to a bank or a major automotive company, the value is higher because there is a captive business. If the general insurer is a stand-alone, the valuation is much lower,” says an industry executive.

One of the more recent general insurance transactions involved MPHB Capital Bhd’s sale of its 51% equity interest in MPI Generali Insurans Bhd to Generali Asia NV for about RM510 million. The transaction implied a price-to-book ratio of 1.38 times.

Generali Asia went on to acquire Affin Group’s life and general insurance business and is now Generali Malaysia, with Affin Group holding a 30% stake.

In 2022, AMMB Holdings Bhd (KL:AMBANK) sold its entire equity interest in AmGeneral Insurance Bhd to Liberty Insurance Bhd for RM2.29 billion, implying a price-to-book ratio of 1.42 times.

One of the biggest general insurance transactions in recent years was Public Bank Bhd’s (KL:PBBANK) acquisition of a 44.2% stake in LPI Capital Bhd (KL:LPI) for RM9.80 per share or RM1.72 billion from the estate of the late Tan Sri Teh Hong Piow and Consolidated Teh Holdings Sdn Bhd.

The deal was completed in December 2024. At the point of acquisition, LPI was trading at 2.27 times price to book.

“Public Bank’s acquisition of LPI was high because the latter has a captive business through Public Bank. As for Berjaya Sompo, it has some captive business through CIMB Group Holdings Bhd (KL:CIMB). But the volume of business is smaller,” the industry executive explains.

Sources point out that the bankers are careful in approaching potential buyers for BCorp’s 30% stake in Berjaya Sompo because the deal has to go through regulatory approvals first even before negotiations can begin.

“Bank Negara Malaysia needs to give the green light before the ball can start rolling. So, at the moment, the bankers are only looking at potential suitors who would possibly pass Bank Negara’s ‘fit and proper’ test before making any concrete proposals,” one of the sources observes.

BCorp declined to comment when contacted.

BCorp ceded control of Berjaya Sompo in 2011, when Sompo Japan raised its holding to 70%, leaving Berjaya Capital with the minority block it still holds today.

Although it would appear that BCorp is divesting a profitable dividend-paying associate in Berjaya Sompo, the move is not out of character for the group and is in line with controlling shareholder Tan Sri Vincent Tan’s monetisation of group assets as BCorp’s balance sheet remains under pressure.

In recent years, BCorp has monetised several assets and partial stakes as part of a broader portfolio-pruning exercise. The group has also disposed of non-core assets such as its entire 71.73% stake in Berjaya Higher Education Sdn Bhd, which owns Berjaya University College; waste management company Berjaya Enviro Holdings Sdn Bhd to Naza Corp for RM700 million; and conducted partial disposals of REDtone shares (4.14%, for RM29.76 million) to raise cash for borrowings and working capital.

BCorp has also proposed to dispose of its 80% stake in Vietnam joint-venture Berjaya-Handico12 for RM201.96 million, saying it is an opportunity to realise its investment.

In fact, Tan is also said to be considering selling his 30% equity interest in Prudential Malaysia, with one report saying he may seek a valuation of RM20 billion or more for the business, having already offloaded a 19% stake earlier this year.

Tan’s Detik Ria Sdn Bhd, which is also linked to the royal family of Johor, and Prudential plc settled a long-running legal dispute last year that resulted in the sale of the 19% stake to the UK insurer. The agreement valued the Malaysian unit at about RM8 billion and left Detik Ria with a 30% stake and Prudential with 70%, the limit under Malaysian rules for foreign investors in local insurers. A buyer for Tan’s stake would need to be Malaysian.

BCorp posted a net loss of RM556.1 million in FY2025, after a net profit the year before, on revenue that was 7.5% lower at RM9.34 billion from RM10.1 billion in the prior year. Net losses widened for the third quarter ended March 31, 2026 (3Q2026) to RM176.24 million on revenue that was 14% lower year on year at RM2.2 billion, on account of a weaker performance from the services and non-food retail business segments.

Shares of BCorp have dipped 9.3% year to date, closing at 24.5 sen last Thursday and valuing the group at RM1.52 billion.

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