UM Land reaches five-year high

PETALING JAYA: Shares of United Malayan Land Bhd (UM Land) jumped 12 sen, or 5.08%, to more than five-year high at RM2.48 on news that the low-profile property developer will be taken private by its major shareholders.

Year-to-date, the rise in UM Land's share price represented an increase of 97 sen, or 64.2%.

The company had on Thursday announced that it had received a takeover offer from Seleksi Juang Sdn Bhd and parties acting in concert, which have a combined 77.52% stake in the company, by buying over the rest of the 22.48% or 67.81 million shares not yet owned by them for a cash consideration of RM2.50 per share.

While the offer price was a slight premium to its current trading price, it represented a discount of around 18% from UM Land's net asset value per share of RM3.04.

In that sense, some analysts said it was a good deal for the parties offering to buy out the company.

“UM Land certainly has a lot of potential, considering the number of significant projects it has, especially in the Iskandar Malaysia region in Johor,” said an analyst.

“Perhaps the market has significantly undervalued the counter all this while,” he added.

UM Land's major projects included the Seri Alam township in the Eastern Corridor of Iskandar Malaysia, Johor and the Seri Putra mixed residential development in Bangi, Selangor.

Others include the Suasana Bangsar condominium in Kuala Lumpur, and the ongoing Suasana Bukit Ceylon project in the Kuala Lumpur Golden Triangle area.

For the first quarter ended March 31, 2012, UM Land registered a net profit of RM136,000 which translated into an earnings per share (EPS) of 0.05 sen, compared with a net profit of RM13.97mil and EPS of 4.63 sen for the corresponding period last year.

Revenue for the first quarter of financial year 2012 was also lower at RM51.6mil, compared with RM82.2mil previously.

UM Land said in a statement that its substantial shareholder Wawasan Perangsang Mewah Sdn Bhd would cooperate with Seleksi Juang to exercise control over the company for the takeover process.

Upon completion of the takeover process, UM Land would be delisted from Bursa Malaysia.

According to a filing with Bursa, Seleksi Juang's equity interest are equally held by Datuk Ng Eng Tee and Tan Sri Syed Mokhtar Shah Syed Nor.

UM Land's other substantial shareholders include Temasek Holdings (Private) Ltd through CapitaLand Ltd, which owned 62.58 million shares, or a 20.75% stake, in the company.

By The Star