We are ceasing coverage on Selangor Properties Bhd (SPB) due to its impending suspension of trading on 7 May 2019. Note that, the capital repayment of RM6.30/share will be made within 10 days from the entitlement date, i.e. 13 May 2019.

6 May will be the last day of trading of SPB shares

Selangor Properties Bhd (SPB) announced that the trading of SPB share on Bursa Malaysia will be suspended with effect from 9am, 7 May 2019 (Tuesday). Accordingly, the last day of trading of SPB shares will be on 6 May 2019.

To recap, the Wen family, via Kayin Holdings Sdn Bhd (Kayin), had offered to take SPB private at RM6.30/share via a selective capital reduction and repayment exercise (SCR).

Under the SCR, all the shareholders of SPB whose names appear on the record of depositors of SPB on 13 May (Entitlement Date) other than Kayin shall be entitled to receive a cash consideration of RM6.30 for each SPB share held on the Entitlement Date. The capital repayment will be made within 10 days from the Entitlement Date.

Our view

As expected, the privatisation exercise is a success, as the offer price translates to 0.8x CY19 P/B, a premium to the stock’s 5-year historical P/B ratio of 0.6x and the sector’s average CY19 P/B ratio of 0.6x. Given the challenging market environment and low trading liquidity of SPB’s shares, the SCR represents an opportunity for entitled shareholders to realise their investments in SPB.

Ceasing coverage

We officially cease coverage on SPB as the stock will soon be de-listed. Our last rating was Accept Offer with a target price of RM6.30.

Source: TA Research - 29 Apr 2019