PETALING JAYA: YTL Corp Bhd proposes to privatise YTL Land & Development Bhd through a share exchange offer.
YTL Corp told Bursa Malaysia that the share exchange offer entails the proposed acquisition by YTL Corp of YTL Land shares at 36 sen per share and YTL Land irredeemable convertible unsecured loan stock (ICULS) at 32 sen per ICULS.
The proposed offer will be satisfied through the issuance of new shares in YTL Corp at an issue price of RM1.14 each. With that, it will translate to an exchange ratio of about 0.32 YTL Corp share for each YTL Land share and 0.28 YTL Corp share for each YTL Land ICULS.
The proposed offer is not conditional upon any minimum level of acceptances of the offer shares as YTL already holds more than 50% of the voting shares of YTL Land.
As at June 7, 2019, YTL Corp owns a 65.26% stake in YTL Land (excluding treasury shares) as well as 78.95% of the total outstanding YTL Land ICULS.
Based on the exchange ratios, the shares offer price and ICULS offer price represent discounts of 5.4% and 9.1% over one-month volume weighted average prices of YTL Land shares and ICULS.
YTL Land’s share price closed 1 sen or 2.7% lower at 36 sen today, while YTL Corp gained 1 sen or 0.9% to RM1.14.
Based on the 288.05 million offer shares and 208.78 million offer ICULS, YTL Corp may issue up to 149.57 million consideration shares assuming all the holders accept the offer.
YTL Corp said YTL Land shareholders who exchange their offer securities for YTL Corp shares are expected to benefit from YTL Corp’s position as one of the top 50 largest stocks listed on Bursa Securities.
“The proposed offer provides an opportunity for the holders to reduce their exposure to a single industry business (i.e. property development) that has plateaued in terms of growth and development opportunities in recent years, and the outlook for which is soft for the near to medium term, in exchange for an investment in the more diversified range of businesses and earnings profile of the YTL Corp.”
Currently, both YTL Corp and YTL Land are required to comply with the regulatory requirements as well as listing obligations prescribed by Bursa Securities for listed issuers, representing an overlap of administrative efforts and costs.
However, YTL Corp said the delisting of YTL Land will eliminate such overlap, dispense with expenses to maintain the listing status of YTL Land and allow YTL Land to rechannel its resources towards its core business instead.
YTL Land was listed on Oct 7, 1973.
The offer will remain open for acceptances for at least 21 days from the posting date.