AmResearch said in a research note said the final closing date of the voluntary takeover offer was on March 31.
On March 30, IOI Corp announced the level of acceptances for its voluntary takeover of IOI Properties had reached 90.65% of the latter’s issued and paid-up share capital on March 30.
IOI Corp had previously said that as long as it received acceptances resulting in the minimum level of 90% shareholding in IOI Properties, it would suspend and delist IOI Properties.
Shareholders of IOI Properties, who have not accepted IOI Corp’s voluntary takeover offer of the company, will face the risk of holding shares in an unlisted company. The only form of return that they would get would be dividends.
“To recap, we view the privatisation of IOI Properties positively as IOI Properties is being acquired close to the bottom of the property cycle.
“Offer price of RM2.598 per share values IOI Properties at an annualised FY09F price-to-earnings (PE) of 8.9 times and price to book value (P/BV) of 0.7 times versus the sector’s average P/BV of 1.1 times,” said the research house.
AmResearch said the acquisition of IOI Properties would increase IOI’s FY10F net profit by 4% to 5% as the elimination of minority interest would more than compensate for the increase in IOI’s share base and loss of interest income.
After the privatisation exercise of IOI Properties, IOI Corp would still have plenty of cash left in its reserves.
The group’s gross cash and cash equivalents amounted to RM1.9 billion as at end-December 2008. Cash outflow from privatising IOI Properties was about RM66 million.
“We believe that IOI Corp would most probably still be looking for acquisitions or expansions in the downstream segment of oleochemicals or specialty fats.
“We maintain a Buy on IOI Corp as it will benefit from improving crude palm oil prices. IOI Corp is one of the more efficient plantation companies in the country,” it said.
By The EDGE Malaysia (by Joe Chin)
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