Merge Housing to go private

PETALING JAYA: Property developer Merge Housing Bhd's chief and his two brothers are looking to take the company private, by offering to buy up all remaining shares not owned by them, or some 69.2 million shares, for RM45mil.



In a Bursa Malaysia announcement yesterday, Merge Housing's managing director Lee Kuang Chong and his two brothers, Lee Fatt Chong and Lee Heng Choong, proposed to undertake a conditional take-over offer to buy all the remaining shares of RM1 each in Merge Housing (net of treasury shares) not owned by them for 65 sen per share.

The brothers collectively hold 75.83 million shares in the company, or representing 52.37% of the issued and paid-up capital of Merge Housing (excluding 5.21 million treasury shares). Lee Kuang Chong holds a direct equity interest of 30.11%, Lee Fatt Chong has a 17.36% stake and Lee Heng Choong's holding is 4.9% in Merge Housing.

The offer price represented a premium of 5.5 sen or 9.24% above the closing price of Merge Housing shares on Tuesday of 59.5 sen, being the last trading day prior to the date of this notice.

The announcement said that the offer price was arrived at after taking into consideration a premium of 9.8 sen or 17.75% above the five-day volume weighted average market share price (VWAP) of Merge Housing shares up to and including June 28, of 55.2 sen and a premium of 10.4 sen or 19.05% above the one-month VWAP up to and including June 28 of 54.6 sen.

The consideration for the offer will be satisfied in cash and should the company declare or pay any dividend and/or other distributions on or after the date of the announcement but prior to the close of the offer, shareholders were entitled to retain the dividend and/or distributions.

However, the consideration for each offer share shall be reduced by the quantum of the net dividend and/or distribution per Merger Housing share.

No rationale was provided for the privatisation exercise.

Based on the company's annual report 2010, a net profit of RM1.13mil was posted against a revenue of RM92.6mil for the financial year ended May 31 2010. Meanwhile, it made a net loss of RM24.6mil against a revenue of RM83.6mil for the financial year ended May 31 2009.

According to the group's website, its major land bank is located in Subang 2, Mon't Kiara, Puchong/Old Klang Road as well as Bukit Jelutong. Although it initially catered to the mass low to medium cost market, the group has now shifted into landed properties and higher end properties.

By The Star