S P Setia intends to acquire I&P Group from PNB and ASB to tap inter group synergy and fast track ex
14 Apr 2017
S P Setia Berhad (S P Setia), Permodalan National Berhad (PNB) and Amanahraya Trustees Berhad (as trustee for Amanah Saham Bumiputera) (ASB) had entered into a non-binding Memorandum of Intent (MOI) to commence negotiations on the proposed acquisition by S P Setia of the entire equity interest in I&P Group Sdn. Berhad (I&P Group), which has remaining 4,263 acres of landbanks, to fast track its expansion plan (“Proposed I&P Acquisition”).
The indicative price for the Proposed I&P Acquisition is estimated to be within the range of RM3.5 billion to RM3.75 billion. However, the final purchase price will only be determined and agreed upon after taking into consideration the necessary due diligence results, the audited net assets value (NAV) of I&P Group which as at 31 December 2016 was RM3.16 billion, and the market value of all the landbanks, on-going projects and investment properties of I&P Group as appraised by the independent property valuers to be appointed by S P Setia. The Proposed I&P Acquisition will be funded by a combination of equity, internally generated funds and borrowings.
S P Setia is constantly on the lookout for opportunities to expand its landbanks and to stay ahead as the leading township developer in Malaysia. Upon successful completion of the Proposed I&P Acquisition, S P Setia will have increased its prime landbanks in Central Klang Valley and Johor Bahru significantly.
From PNB’s perspective, the proposed transaction is in line with its recently announced Strategic Plan to transform the performance of its strategic and core companies as well as rationalise and enhance PNB’s property investments. It will also allow S P Setia and I&P Group to enjoy strategic and synergistic benefits through cross-fertilisation of resources, best practices, and technical know-how between the two companies.
On the same day, S P Setia had also via a wholly owned subsidiary, KL East Sdn Bhd, entered into a conditional sale and purchase agreement with Seriemas Development Sdn. Berhad (a 60% owned subsidiary of PNB Development Sdn. Berhad) to acquire from the latter, a parcel of land measuring approximately 342.5 acres located in Bangi, Selangor known as Bangi Estate for a purchase price of approximately RM447.58 million (RM30.00 per square foot) plus a share of the future audited profit before taxation from the development of the said land, up to a maximum of RM3.00 per square foot.