Wednesday, December 15, 2010

MRCB, IJM Land extend viability of MoU until Dec 29

KUALA LUMPUR: MALAYSIAN RESOURCES CORP []oration Berhad and IJM Land Bhd have extended the validity of their MoU -- to merge and create the country's second-largest property company -- to Dec 29 from Dec 14.

The companies said in separate statements on Wednesday, Dec 15 that both had agreed to extend the validity of the MoU 'as both parties are still in the midst of finalising the terms and conditions of the definitive merger agreement for the proposed merger'.

On Nov 23, MRCB and IJM Land announced the merger plan to create a property company with a market capitalisation of over RM7 billion and landbank of more than 9,000 acres.

The newly merged entity (newco) is expected to be listed after the second quarter of next year while a more solid merger agreement is expected to be signed by Dec 14.

To recap, shareholders of both companies will exchange their shares for shares in the newco. Shareholders of MRCB and IJM Land will be offered a non-binding offer price for their shares at RM2.30 and RM3.65, respectively, which are at premiums of 15.6% and 18.1%, respectively, over their last traded prices last Friday.

The offer valued IJM Land at a price-to-book ratio of 2.43 times and MRCB at 2.61 times, based on their latest reported results as at Sept 30.

The newco is also expected to have combined revenues of over RM2 billion and an asset base in excess of RM3 billion.

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