Media Prima makes conditional takeover offer for NSTP

KUALA LUMPUR: MEDIA PRIMA BHD [] (MPB) has made a conditional takeover offer for its 43%-owned The New Straits Times Press (Malaysia) Bhd (NSTP).

MPB said on Friday, Oct 16 the conditional take-over the remaining 57% stake in NSTP would be a 1:1 share exchange for MPB shares at an issue price of RM2 and 1 free MPB warrant for every 5 offer MPB shares accepted.

At RM2, the MPB offer share is 23 sen above its Thursday closing price of RM1.77 before it was suspended for the announcement. NSTP shares closed at RM2.46. Based on the RM2 offer for MPB shares, the 57% stake it intends to acquire is worth RM247.38 million.

MPB also intends to distribute up to 24.604 million new MPB bonus warrants to its existing shareholders at an entitlement date to be determined later.

The corporate exercise includes MPB's plans to raise RM150 million via a bond issue with 50 million detachable warrants which are convertible into 50 million shares in the enlarged MPB Group. The bond issue is to finance its working capital and investments. Additional plans in the future may include launch of an employee share option scheme (ESOS) for the employees of enlarged MPB.

The offer was undertaken principally to increase MPB's equity interest in NSTP with the intention of making NSTP a subsidiary. Upon completion of the exercise, which is expected to be concluded by year-end, NSTP would be delisted.

The consolidation of the two media companies was projected to generate over RM1 billion in annual revenue with net profits exceeding RM140 million.
 
NSTP and MPB are now trading at a FY08 PE of 9.53 times and 11.03 times.

Written by Thomas Soon & Darlene Liew

  

The take over deal above will favours MPB price, most likely MPB will open trade at RM2 range next week.