Wednesday, February 9, 2011

#Flash* MPHB seeks 100pct ownership in Magnum in RM1.66b deal

KUALA LUMPUR: MULTI-PURPOSE HOLDINGS BHD [] (MPHB) is seeking to take over its associate Magnum Holdings Bhd for RM1.66 billion as it seeks to have 100% ownership of Magnum to make gaming the group's core business.

MPHB said on Wednesday, Feb 9 it had entered into an MoU with the CVC Capital Partners Asia Pacific group to acquire the remaining 49% stake in Magnum and RM674.65 million nominal value redeemable convertible loan stock class C of Magnum (RCULS-C) for RM1.637 billion.

MPHB said the purchase consideration for the acquisitions would be via 343.82 million new MPHB shares at an issue price of RM2.30 per share and RM809.198 million cash.

MPHB also entered into another MoU with the management of Magnum to acquire two million magnum shares or 2% equity interest and RM4.86 million nominal value of RCULS-C together with all accrued interest remaining unpaid.

'The total purchase consideration for the proposed acquisition of management securities is RM37.198 million via issuance of 16.17 million new MPHB shares at an issue price of RM2.30 per MPHB share,' it said.

MPHB said the proposed acquisition will enable MPHB to have 100% ownership in Magnum, thus making gaming the core business of the MPHB group.

'The proposed acquisition is expected to further improve and strengthen the future profitability and cash flow position of the MPHB group via the higher share of Magnum's earnings and cash flows,' it said.

MPHB said the enlarged share capital following the issuance of the new MPHB shares would strengthen its balance sheet and improve its liquidity.

'The Proposed Acquisition is expected to widen the investor base appeal, including institutional investors of MPHB, due to better clarity in MPHB's core business. As part of its balance sheet management, in respect of asset allocation, the focus of the MPHB group moving forward will be in the business of gaming and this presents an opportunity for rationalisation of the MPHB group's non-core assets through a divestment programme to be initiated,' it said.

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