CIMB acquiring Jupiter Securities for RM55m cash

PETALING JAYA: CIMB Group Holdings Bhd is acquiring the entire stake in stockbroking firm Jupiter Securities Sdn Bhd for RM55 million cash. The proposed acquisition is a strategic initiative taken in connection with the group’s proposed partnership with China Galaxy International Financial Holdings Ltd, a subsidiary of China Galaxy Securities Co Ltd, wherein Jupiter Securities will be the platform for the partnership’s Malaysia operations.
In a filing with Bursa Malaysia today, CIMB said its wholly owned subsidiary CIMB Group Sdn Bhd has signed a conditional share purchase agreement with the shareholders of Jupiter Securities for the proposed acquisition.
Jupiter Securities is a subsidiary of Olympia Industries Bhd and is a participating organisation of Bursa Malaysia Securities Bhd. It engages in the business of dealing with securities and acting as a stock broker.
Jupiter Securities’ subsidiaries are JS Nominees (Tempatan) Sdn Bhd, JS Nominees (Asing) Sdn Bhd, Jupiter Equities Sdn Bhd and Jupiter Research Sdn Bhd.
In a separate filing, Olympia said it will dispose of its entire 76.55% shareholding in Jupiter Securities for RM42.1 million, enabling the Olympia group to realise its investment in Jupiter Securities and reduce the group’s borrowings.
It expects to use the net proceeds to repay borrowings of RM15 million while the balance of RM26.3 million will be used as working capital for the group.
Based on the latest audited financial statements ended Dec 31, 2016, Olympia said the total estimated gain from the proposed disposal is RM24.6 million and is expected to increase its net assets per share from 38 sen to 40 sen, while reducing its gearing from 44.3% to 37.9%. It expects to complete the proposed disposal by the first quarter of 2018. The transaction is subject to approval from the relevant authorities.
CIMB’s share price fell 0.15% or 1 sen to close at RM6.75 today with 6.84 million shares traded, giving it a market capitalisation of RM61.10 billion.