KUALA LUMPUR: Berjaya Corporation Bhd (BCorp) has signed a memorandum of understanding (MoU) with Berjaya Retail Sdn Bhd (BRetail) and Tan Sri Vincent Tan Chee Yioun, the major shareholder of both BCorp and BRetail, to acquire a 100% stake in home appliances brand Singer (M) Sdn Bhd from BRetail for RM388 mil.
This is after the set-off of the inter-company debts of the Singer Group of RM148 mil against the purchase price of RM536 mil.
In a filing with Bursa Malaysia today, BCorp said the acquisition would involve the issuance of new BCorp shares at 33 sen each, representing a premium of 14 sen, or about 74% over last Friday’s closing price of 19 sen per BCorp share.
BCorp will issue about 1.176 billion BCorp shares for the net payment of RM388 mil, it said.
“In addition, Tan will provide to BCorp a profit guarantee that Singer will achieve a profit after tax of RM20 mil per year for the financial years ending Dec 31, 2020 and Dec 31, 2021,” it added.
BCorp said based on a net payment of RM388 mil for the 100% stake in Singer, the profit guarantee of RM20 mil per year would translate into a net price-earnings multiple of 19.4 times.
Singer is a household brand in Malaysia with an existing issued share capital of RM438 mil.
As at Dec 31, 2019, the unaudited net assets of the Singer Group stood at RM561 mil.
Commenting on the exercise, Tan said Singer has been in Malaysia for more than 100 years and has more than 450 stores nationwide with about 3,000 independent sales agents.
“I am confident that the acquisition of Singer will enhance the profile of our group and complement BCorp’s diverse range of businesses.
“I believe the acquisition will contribute positively to the future earnings of the BCorp Group,” he added.
Meanwhile, in a separate filing with the exchange, BCorp said the trading of its securities would resume tomorrow after having been suspended on June 1 and 2. – June 2, 2020, Bernama
