Boustead Holdings; Hold; RM5.26
Price Target: RM5.30; BOUS MK

Shares of Boustead Holdings (Boustead) and its 53.6% owned subsidiary Al-Hadharah Boustead REIT will be suspended for two days (15 July and 16 July) pending a material announcement. According to the media, this is in relation to the potential privatization of Al-Hadharah Boustead REIT.

The other shareholders of the REIT are LTAT (12.7%), Lembaga Tabung Haji (8.0%) and KWAP (6.5%). Assuming a 10% premium to its NAV of RM1.79, Boustead and its parent company LTAT would need to fork out RM437m to take the REIT private. As at 31 March 2013, Boustead was in a net debt position of RM6.5bn or net gearing of 1.2x which would increase to 1.3x with the privatisation. We maintain our HOLD rating on Boustead with a TP of RM5.30 based on a 20% discount to SOP.

Source: HwangDBS Research - 15 Jul 2013