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IJM plans to buy balance stake in ICP
9/6/2008 |
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PETALING JAYA: Construction group IJM Corp Bhd has proposed to buy the remaining stake in unit Industrial Concrete Products Bhd (ICP) at RM3.30 a share in a deal that values the pre-cast concrete producer at RM1.21bil.
IJM¡¯s offer is about 16% higher than ICP¡¯s closing price of RM2.83 yesterday. Trading in both ICP and IJM was suspended from 2.30pm yesterday to make way for the late annoucement.
IJM currently owns a 63.44% stake in ICP. The offer means IJM will pay RM443mil for ICP¡¯s shares not already owned by the group.
IJM, which was traded at RM5.10 yesterday, said it had proposed to settle the acquisition via a combination of cash and new IJM shares. The exercise is targeted for completion by the year-end.
¡°The offer is undertaken by IJM to increase IJM¡¯s equity interest in ICP with the intention of making ICP a wholly-owned subsidiary,¡¯¡¯ IJM told Bursa Malaysia.
It said the move would enable the group to streamline its operations and give ICP shareholders ¡°the opportunity to swap for shares in IJM which have higher liquidity and more diversified earnings profile.¡¯¡¯
Under the plan, IJM will offer ICP shareholders 26 sen cash per share plus 0.6 new IJM share of RM1 each for every ICP share held. The new IJM shares will be priced at RM5.06, which represented the stock¡¯s five-day weighted average price up to Thursday.
¡°The board believes that further consolidation of ICP will enhance the balance sheet, earnings and future cash flows of IJM and its subsidiaries in view of the synergistic benefits and positive future prospects of ICP,¡¯¡¯ it said.
CIMB Research forecast that ICP would make a net profit of RM119mil, or 32.6 sen a share, for the year ending March 31, 2009. The company posted a net profit of RM32.27mil, or 8.78 sen per share, in the first quarter ended June 30.
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