LBS Bina in HoA to buy stake in NWP at a discount, to jointly develop China project

PETALING JAYA: LBS Bina Bhd is continuing its acquisition trail with the proposed purchase of a 73.7% stake in timber products maker NWP Holdings Bhd for RM93.5 million or 8.5 sen per share.
The 8.5 sen offer price represents a huge discount of 29.17% to NWP’s five-day volume weighted average market price of 12 sen. It is also a 14% discount to NWP’s adjusted net tangible assets of 9.88 sen per share as at Nov 30, 2017 after taking potential impairment/provision of doubtful debts of RM10.6 million or 2.7 sen per share into consideration.
Both companies will jointly undertake a 264-acre mixed commercial development project in Zhuhai, Guangdong Province, China.
In April 2016, LBS Bina launched a takeover for construction firm ML Global after increasing its stake in ML Global from 31.95% to 50.92%.
LBS Bina said in a filing with the stock exchange today it has entered into a heads of agreement (HoA) with NWP for the share acquisition.
Upon completion of the share subscription, LBS Bina will trigger a mandatory general offer obligation to acquire the remaining shares in NWP.
For the property development venture in China, LBS Bina’s wholly owned subsidiary Lamdeal Investments Ltd holds 60% interest in Zhuhai International Circuit Ltd (ZICL), which is the registered and beneficial owner of the land. ZICL has obtained development approval from the local authorities for the land.
NWP’s participation in the project will mark its diversification into property development. NWP said the disposal of its shares to LBS Bina is to raise funds to part-finance the project.
LBS Bina and NWP are expected to enter into definitive agreements within 60 days of the HoA.