In a bid to expedite its expansion plans and create one of Malaysia’s biggest property players, SP Setia has announced on Friday (14 April) that it is in talks to purchase rival I&P Group for between RM3.5 billion and RM3.75 billion, according to a filing with Bursa Malaysia on Friday (14 April).
In line with this, the company has entered into a non-binding Memorandum of Intent (MOI) to start negotiations on the purchase of the entire share capital of I&P Group from Amanah Saham Bumiputera (ASB) and Permodalan National Berhad (PNB), a state investment fund that owns a 63 percent stake in SP Setia as well a significant interest in the acquiree.
“As the major shareholder of both companies, we are pleased to see the coming together of S P Setia and I&P Group, two long-standing property brands that have strong track record of delivering value to homeowners and investors,” said PNB President and Group CEO Dato’ Abdul Rahman Ahmad.
“The strategic rationale for the combination is clear and compelling. The two groups’ landbanks are in close proximity, whilst their respective customer base is highly complementary, which shall facilitate greater value creation. This combination will create the largest property company in Malaysia and one of the leading players, with a total landbank of close to 10,000 acres”.
Upon successfully purchasing I&P, which has a remaining landbank of 4,263 acres, SP Setia will significantly enlarge its prime landbank in central Klang Valley and Johor Bahru.
The proposed acquisition will be funded by a combination of equity, borrowings, and internally generated resources.
Meanwhile, SP Setia announced on Friday that its wholly-owned subsidiary KL East Sdn Bhd has agreed to acquire 342.5 acres of land in Bangi, Selangor from Seriemas Development Sdn Berhad. The seller is a unit of PNB Development Sdn. Berhad, which in turn is fully owned by PNB.
The consideration consists of around RM447.58 million or RM30 psf, plus a share of the future audited profits before tax amounting up to RM44.76 million (RM3 psf) from the development of the said land.
Located near Bandar Baru Bangi, Kajang and Semenyih, SP Setia plans to develop the site into a township comprising residential properties and commercial units, with an anticipated total gross development value (GDV) of about RM2.74 billion.
“Bangi Land is also located within a five-km radius from our existing two sister mixed development townships, namely Setia Ecohill and Setia Ecohill 2. With our good track record, we are confident of developing Bangi Land into another success story for us to be proud of”, said SP Setia President and CEO Dato Khor’ Chap Jen.
Complete Sources:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/5396205
http://www.bursamalaysia.com/market/listed-companies/company-announcements/5396209
Among SP Setia’s developments are:
Isle of Palm @ Setia Pearl Island
Image sourced from Business Times Singapore
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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