IJM Corporation Berhad · MYX:IJM
IJM Corporation Berhad — Merger or Acquisition (January 2015)
33 slides from IJM Corporation Berhad's merger presentation, Jan 8, 2015
Slide 1: Presentation to the shareholders of IJM Corporation Berhad on proposed privatisation of IJM Land
IJM CORPORATION BERHAD (Company No. 104131-A) Presentation to the shareholders of IJM Corporation Berhad in relation to the proposed privatisation of IJM Land Berhad by way of a members’ scheme of arrangement pursuant to Section 176 of the Companies Act, 1965 8 January 2015 1
Slide 2: Overview of the Proposed Privatisation
1. Overview of the Proposed Privatisation On 9 June 2014, IJM announced the Proposed Privatisation to be undertaken via a members’ scheme of arrangement between IJM Land, IJM and/or its nominee(s), and all the Scheme Shareholders pursuant to Section 176 of the Act involving the acquisition by IJM
Slide 3: Overview of the Proposed Privatisation (Cont'd)
1. Overview of the Proposed Privatisation (Cont’d) Based on 558,772,287 IJM Land Shares held by the Scheme Shareholders (representing 35.85% of the issued and paid-up share capital of IJM Land as at 30 November 2014), the total consideration for the Proposed Privatisation is approximately RM1.98 b
Slide 4: Basis and Justification for the Offer Price
2. Basis and Justification for the Offer Price The Offer Price of RM3.55 represents a premium based on the following historical market prices of IJM Land Shares: Share IJML Adjusted Premium price Dividend share price* (RM) (RM) (RM) (RM) (%) Last Traded Price 3.20 0.06 3.14 0.41 13.06 5-day VWAMP#
Slide 5: Basis and Justification for the Offer Price (Cont'd)
2. Basis and Justification for the Offer Price (Cont’d) The total consideration of RM1.98 billion translates into PER and PBR of 17.22 times and 1.68 times, respectively, as follows: IJM Land Group Audited as at 31 March 2014 Ratio Profit after tax and RM310.48 million 17.22 times minority interes
Slide 6: Basis and Justification for the Offer Price (Cont'd)
2. Basis and Justification for the Offer Price (Cont’d) The PBR and PER above falls within the range of the trading PBR and PER based on the closing share price of the comparable companies on the Last Trading Day i.e. 5 June 2014: PER PBR Comparable Company (times) (times) UEM Sunrise 15.45 1.55 I
Slide 7: Basis and Justification for the Issue Price
3. Basis and Justification for the Issue Price The issue price of RM6.66 represents the following premium and/or discount to the historical market prices of IJM Shares: Share IJM IJM 2015 Adjusted (Discount) / price Dividend Dividend share price* Premium RM RM RM RM RM % Last Traded Price 7.00 0.2
Slide 8: Valuation of Material Real Estate
4. Valuation of Material Real Estate IJM and IJM Land had jointly appointed the Independent Valuers to conduct the valuation of the material real estate of IJM Land Group, which accounts for 72.0% of IJM Land Group’s NBV 8
Slide 9: Valuation of Material Real Estate (Cont'd)
4. Valuation of Material Real Estate (Cont’d) Equity Audited NBV Interest Independent Market Real Estate as at Surplus by IJM Valuer Value 31 March 2014 Land (RM mil) (RM mil) (RM mil) Bandar Rimbayu 60% Knight Frank 1,258.3 1,726.0 467.7 Pantai Sentral Park 100% Knight Frank 250.9 400.0 149.1 The L
Slide 10: Valuation of Material Real Estate (Cont'd)
4. Valuation of Material Real Estate (Cont’d) Equity Audited NBV Interest Independent Market Real Estate as at Surplus by IJM Valuer Value 31 March 2014 Land (RM mil) (RM mil) (RM mil) S2 Heights 100% Raine & Horne 348.8 940.3 591.5 Seremban 2 100% Raine & Horne 241.4 681.6 440.2 Bandar Utama 100% C
Slide 11: Rationale and Benefits of the Proposed Privatisation
5. Rationale and Benefits of the Proposed Privatisation In line with your Board’s intention to obtain full control of IJM Land by making it a wholly-owned subsidiary Greater liberty to plan and decide on the strategic and future business direction of IJM Land Leverage on IJM’s financial standing and
Slide 12: Effects of the Proposed Privatisation
6. Effects of the Proposed Privatisation Before the Proposed Privatisation After the Proposed Privatisation IJM existing IJM existing Scheme shareholders shareholders Shareholders 100% Scheme 84.2% 15.8% Shareholders 64.15% 35.85% 100% IJM does not intend to maintain the listing status of IJM Land u
Slide 13: Effects of the Proposed Privatisation: Share Capital
6. Effects of the Proposed Privatisation (Cont’d) Share Capital The issued and paid-up share capital shall increase by approximately 18.7% post Proposed Privatisation: Minimum Scenario Maximum Scenario No. of IJM Shares No. of IJM Shares (mil) (mil) As at 30 November 2014 1,489.4 1,489.4 To be issue
Slide 14: Effects of the Proposed Privatisation: Earnings and EPS
6. Effects of the Proposed Privatisation (Cont’d) Earnings and EPS Based on the proforma illustration below, the Proposed Privatisation is expected to contribute positively to the enlarged IJM Group: After the Audited for FYE Proposed 31 Mar 14 Privatisation RM mil RM mil Net profit attributable to
Slide 15: Effects: NA, NA per Share and Gearing
6. Effects of the Proposed Privatisation (Cont’d) NA, NA per IJM Share and gearing Based on the proforma illustration below, the new issuance of IJM Shares will improve the shareholders’ funds of IJM post Proposed Privatisation and accordingly improve the gearing of the enlarged IJM Group from 0.48
Slide 16: Approvals required
7. Approvals required The Proposed Privatisation is subject to the following being obtained: Approvals required Status Obtained on 24 1 Grant of waiver by the SC pursuant to PN 44 of the Code July 2014 To be obtained 2 Approval of IJM shareholders at today’s EGM Waiver from IJM shareholders for the
Slide 17: Approvals required (Cont'd)
7. Approvals required (Cont’d) The Proposed Privatisation is subject to the following being obtained: (Cont’d) Approvals required Status To be Approval of the Scheme by the Scheme Shareholders at the Court obtained 5 Meeting of IJM Land by IJM Land To be Sanction of the Scheme by the Court and the l
Slide 18: Tentative Timeline
8. Tentative Timeline Listing of Consideration Shares Lodgement of Court Order Payment of cash Court consideration to Meeting Scheme Shareholders 8 January 2015 March 2015 February 2015 April 2015 EGM Extraction of Court Order Completion of Proposed Privatisation 18
Slide 19: Questions from Minority Shareholder Watchdog Group
IJM CORPORATION BERHAD (Company No. 104131-A) QUESTIONS FROM MINORITY SHAREHOLDER WATCHDOG GROUP IN RELATION TO THE PROPOSED PRIVATISATION OF IJM LAND BERHAD BY WAY OF A MEMBERS’ SCHEME OF ARRANGEMENT PURSUANT TO SECTION 176 OF THE COMPANIES ACT, 1965 8 January 2015 1
Slide 20: Q1. Waiver from independent adviser requirement
Q1. As stated on page 1 of the Circular, pursuant to the waiver obtained from Bursa Securities from having to comply with Paragraph 10.08 of the Listing Requirements, the independent adviser is no longer required for the Proposed Privatisation. i. Please explain for the benefit of the shareholders t
Slide 21: Reply to Question 1(i)
Reply to Question 1(i) The Proposed Privatisation is a related party transaction (“RPT”) pursuant to Paragraph 10.08 of the Listing Requirements in view of EPF’s interests in both IJM and IJM Land as EPF is a major shareholder of IJM and held more than 5% in IJM Land at the time of the initial annou
Slide 22: Reply to Question 1(i) (continued)
b) given that EPF does not have any control or influence on the Boards of IJM and IJM Land in relation to the Proposed Privatisation since it does not have any representative on both the Boards of IJM and IJM Land, and the Proposed Privatisation cannot be approved by EPF solely, it may not be fair t
Slide 23: Reply to Questions 1(ii) and 1(iii)
Reply to Question 1(ii) Due to reasons stated in the Reply 1(i) above, the non-availability of an independent view and recommendation on the Proposed Privatisation would not be detrimental to the interests of the non-interested shareholders of IJM, especially when EPF’s position is no different from
Slide 24: Q2. Waiver allowing interested shareholders to vote
Q2. We also noted from page 19 of the Circular that IJM’s interested major shareholder, EPF, and certain IJM directors also have shareholdings in IJM Land. In view of their interests in the Proposed Privatisation, a waiver had been sought and obtained from Bursa Securities which would allow them to
Slide 25: Reply to Question 2
Based on the justifications as set out in the responses to Q1(i) and Q1(ii), Bursa Securities had granted a waiver from compliance with Paragraph 10.08 of the Listing Requirements, so that EPF would be allowed to vote on the resolution pertaining to the Proposed Privatisation. On the other hand, the
Slide 26: Q3. PBR of the Issue Price
Q3. As shown on page 8 of the Circular, the Offer Price of RM3.55 for each Scheme Share (IJM Land Share) is at price-to-book ratio (“PBR”) of 1.68 times. In the case of the Consideration Share (IJM Share), based on the Issue Price of RM6.66 for each IJM Share, what is the PBR? If the valuation of Ma
Slide 27: Reply to Question 3: PBR with revaluation surplus
Based on the IJM Group’s audited net assets (“NA”) attributable to owners of IJM as at 31 March 2014 of RM6.74 billion, the Issue Price represents a PBR of 1.41 times. If the net revaluation surplus arising from the valuation of the Material Real Estate were taken into account, the adjusted audited
Slide 28: Q4. PER of the Issue Price
Q4. Page 8 of the Circular also states that the Offer Price of RM3.55 for each IJM Land Share represents price-to-earnings ratio (“PER”) of 17.22 times. In the case of the Consideration Share (IJM Share), based on the Issue Price of RM6.66 for each IJM Share, what is the PER? At an issue price of RM
Slide 29: Reply to Question 4: PER and PBR comparison
Based on the IJM Group’s adjusted net profit attributable to the owners of IJM for the financial year ended 31 March 2014 of RM686.71 million (after excluding RM142.89 million, being IJM’s share of the gain on re-measurement arising from the acquisition of additional equity interest in Radiant Pilla
Slide 30: Q5. Role of Principal Adviser and Financial Adviser
Q5. Apart from having Maybank Investment Bank Berhad (“Maybank IB”) as the Principal Adviser, IJM also appointed a Financial Adviser, Newfields Advisors Sdn Bhd (“Newfields”). Please enlighten shareholders why Maybank IB’s role could not be expanded to include that of a Financial Adviser. Shareholde
Slide 31: Responsibilities of the Principal Adviser
The primary responsibilities of the Principal Adviser in relation to the Proposed Privatisation are as follows: • assist IJM with the overall management and co-ordination of the transaction; • advise on compliance with the guidelines and disclosure requirements of the various regulatory authorities
Slide 32: Role of Newfields as Financial Adviser
On the other hand, Newfields, who had been exploring ideas/proposals with the Management on restructuring of IJM’s property division for this transaction, their primary role as Financial Adviser had encompassed advising on the appropriate strategies, including methods and the corresponding terms, to
Slide 33: Thank You
Thank You 15
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