PETALING JAYA: Property developer LBS Bina Group Bhd is extending an unconditiondal mandatory general offer (MGO) to acquire all the remaining shares and warrants it does not own in listed subsidiary ML Global Bhd (MGB) for 56 sen and six sen per share, respectively.

The MGO was triggered by LBS’ recent acquisition of 17 million MGB shares, or an 18.97% equity interest, at 56 sen per share from Datuk Beh Hang Kong for a cash consideration of RM9.5mil. This has increased LBS’ shareholding in MGB to 50.92% from 31.95%, according to a filing with Bursa Malaysia.

Beh, MGB’s managing director, remains a substantial shareholder of the company with a 10.14% stake after this acquisition.

The offer price of 56 sen represents a discount of 9.7% to the five-day volume weighted average market price of MGB shares up to and including April 8, being the last full trading day before the MGO was triggered.

However, the offeror intends to maintain the listing status of MGB on the Main Market of Bursa Malaysia.

According to AmInvestment Bank Bhd, which made the filing on behalf of LBS, the share offer price is equivalent to the share purchase consideration and is also the highest price paid by LBS for MGB shares during the six-month period prior to the date of offer.

“The share acquisition represents an investment by the company in MGB’s businesses, which are complementary to the LBS property development and construction businesses.

“The share acquisition was undertaken by the company to gain control of MGB in order to drive the future strategic direction and business expansion of MGB.

“The share acquisition enables the company to exercise management and operational control over the MGB businesses with a view of improving MGB’s future financial performance and correspondingly enhance the value of the company’s investment in MGB,” it said.

LBS emerged as a substantial shareholder of MGB following its participation in MGB’s fund-raising exercise under MGB’s plan to regularise its Practice Note 17 or PN17 condition in August 2014.

“The board envisages that the MGB roof tiles manufacturing business will face a challenging and competitive outlook in view of the weak market demand for roof tiles.

“However, LBS’ board expects the construction division to continue being the driving force behind the revenue and profit for MGB this year, while LBS’ core competency, experience and track record in the property development and construction sector would enhance MGB’s construction business.”