KUALA LUMPUR (June 12): Trading in shares of Boustead Holdings Bhd (BHB) will be suspended from Bursa Malaysia Securities on June 20, after its major shareholder Lembaga Tabung Angkatan Tentera's (LTAT) control of a 97.63% stake in the group.

LTAT announced the successful takeover bid after its offer for BHB closed at 5pm on Monday (June 12). As such, the Armed Forces Fund Board will procure BHB to take the requisite steps to withdraw its listing status from Bursa Malaysia, in accordance with paragraph 16.07 of the Listing Requirements.

BHB, one of Malaysia’s oldest diversified conglomerates, was listed on the local bourse in 1961, and has grown to comprise more than 80 listed and non-listed subsidiaries and associate companies. It has expanded its business to plantation, property and industrial, pharmaceutical, heavy industries as well as trading, finance and investment.

Shares of BHB were unchanged at 85.5 sen on Monday, with a market capitalisation of RM1.72 billion. The stock grew 36.5% from 63 sen on March 1 to 83 sen on March 3, after the announcement of the takeover offer. Year to date, it has risen 37.9%.

LTAT chief executive Datuk Nazim Rahman said in a statement on Monday that this corporate exercise is the cornerstone of LTAT’s transformation journey, which is critical to the success of the portfolio rebalancing plan as anchored by the Strategic Asset Allocation Framework.

“With this milestone, we trust that BHB’s commercial value will be unlocked and its full potential unleashed in order to boost our assets under management, translating into better returns for our contributors, the members of the Armed Forces.

“Next on our to-do-list is to ramp up the value creation exercise by having greater alignment of strategies between LTAT and all levels across the group. The wholly-owned model allows LTAT to exercise full discretion and deep dive into the conglomerate’s pain points expeditiously. We are determined to reset BHB in a manner that meets LTAT’s objective of undertaking this privatisation exercise,” Nazim added.

In March, LTAT made a voluntary takeover offer for all shares it does not already own in BHB at 85.5 sen apiece. The offer came on the heels of the group’s large quarterly loss of RM402 million in the fourth quarter ended Dec 31, 2022 (4QFY2022), dragged down by the massive RM552 million impairment of unsold Covid-19 vaccines at its pharmaceutical unit Pharmaniaga Bhd.

Kenanga Investment Bank Bhd, in an independent advice circular in April, said LTAT’s conditional voluntary takeover offer is not fair but reasonable.

For the first quarter ended March 31, 2023 (1QFY2023), BHB narrowed its net loss to RM62.8 million quarter-on-quarter from RM402.3 million.

Revenue, meanwhile, decreased to RM3.24 billion from RM3.69 billion mainly due to lower revenue contribution from the property and industrial segment.

However, on a year-on-year basis, BHB sank into the red from a RM290.3 million net profit in 1QFY2022, while revenue reduced 5.84% from RM3.44 billion.