LTAT mulling to take Boustead Holdings private, indicative offer price 80 sen

Lembaga Tabung Angkatan Tentera (LTAT) has announced it wants to take Boustead Holdings Berhad private.

Reports have surfaced since yesterday that LTAT, which holds a 59% stake in Boustead, was mulling to take the conglomerate that has four listed subsidiaries under its belt private.

Earlier, little traded Boustead Holdings Bhd’s share price jumped above 17% following news reports that controlling shareholder LTAT is looking to take the debt-laden conglomerate private.

Today, that news is confirmed when LTAT puts out a statement that indeed it wants to take Bousted private, whilst stating that their intent is still subject for approvals.

According to Bloomberg, LTAT has secured a loan for the privatisation exercise. However, it said the discussions are still in the early stages and that there are no concrete decisions made yet.

"If we decide to proceed with the proposal (to take Boustead private), we expect to propose an offer price of RM0.80 per ordinary share in Boustead. This offer price is indicative only and non-binding. The final offer price in relation to the Proposal (if undertaken) is subject to finalisation by LTAT," said the statement.

LTAT assured the public that subsequent announcements will be made in due course on this matter.

The current market valuation of Boustead, the main contributor to LTAT’s dividend income, appears to be substantially undervalued.

Its net asset per share was at RM1.85 as at end-2019, nearly triple the market price, with the conglomerate’s total borrowings amounted to RM7.91 billion as at end-2019.

Boustead holds equity interest in four publicly listed companies — Affin Bank Bhd, Boustead Plantations Bhd, Boustead Heavy Industries Corp Bhd (BHIC) and Pharmaniaga Bhd, all of which its parent LTAT also holds a stake.

Taking Boustead private would be a tricky maneuver to overcome, as some of these entities have different regulators to seek approvals from.