KUALA LUMPUR (Oct 9): The proposed RM450 million acquisition of Menara CelcomDigi by Sentral Real Estate Investment Trust (Sentral REIT) is deemed fair and reasonable, says independent adviser Public Investment Bank Bhd (PIVB).

In a circular to shareholders, PIVB recommended to non-interested shareholders of Malaysian Resources Corp Bhd (MRCB) to vote in favour of the resolution pertaining to the proposed acquisition at the extraordinary general meeting on Oct 24.

“We are of the view that the valuation of the property using the income approach by investment method is reasonable and the market value of the property derived therefrom is fair.

“Further, we are of the view that the proposed subscription is deemed fair and reasonable because the number of placement units that MRCB intends to subscribe will enable MRCB to maintain its unitholding level in the enlarged unitholders’ capital of Sentral REIT and therefore enable MRCB to continue to enjoy the recurring income and share the profits of Sentral REIT via income distribution,” PIVB said in the circular filed with Bursa Malaysia by MRCB.

In July, Sentral REIT had entered into a deal with MRCB to acquire the 27-storey Menara CelcomDigi in Petaling Jaya for RM450 million.

Sentral REIT had announced that the acquisition will be funded with cash raised through a combination of equity and debt funding exercises.

The equity funding exercise will entail a placement of up to 123.72 million shares, out of which 34.56 million shares would be for MRCB’s undertaking to maintain its current percentage unitholding in Sentral REIT. MRCB currently holds 55.88% of Sentral REIT.

The issuance of 123.72 million shares represents about 11.5% of the existing total units in issue and will be placed out to institutional investors at an issue price to be determined by way of bookbuilding.

The acquisition is expected to be completed by the end of the year.

MRCB shares closed 0.5 sen or 1.1% lower at 45 sen on Monday, valuing the company at RM2.01 billion. Since the beginning of the year, the stock has soared 55.17%.

Sentral REIT finished unchanged at 82 sen, giving it a market capitalisation of RM878.89 million.

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Sentral REIT acquires Menara CelcomDigi for RM450m; proposes share placement