MPHB plan for investors to own Magnum shares

The plan is to allow Multi-Purpose's 5,000-odd shareholders to own Magnum shares by way of restricted offer for sale

Multi-Purpose Holdings Bhd (MPHB) (3859) may offer its shareholders the opportunity to participate directly in its gaming outfit, Magnum Corp Sdn Bhd, by way of restricted offer for sale (ROS), its chief said.

Managing director Datuk Lau Kim Khoon @ Surin Upatkoon said the plan will allow MPHB's 5,000-odd shareholders to own Magnum shares.

MPHB is looking to relist Magnum on the Main Market of Bursa Malaysia.

Lau said the timing will depend on the exit strategy by CVC Capital Partners, a global private equity firm which holds 47 per cent of Magnum.

He said CVC had indicated that it wanted to make an exit, but no time-frame was given.

MPHB holds a 51 per cent stake in Magnum, which operates 485 gaming outlets nationwide.

"We are ready to list Magnum as we have the cash and track record. The best way to do it is to make a restricted offer to the existing shareholders of MPHB," Lau said in an interview with Business Times in Kuala Lumpur.

The cash-rich MPHB has RM1 billion reserves. Its shareholders' fund is RM2.1 billion.

"It would be a good time to list Magnum as it is now worth over RM6 billion. The enterprise value will be more than that when we list and CVC will be able to make a handsome profit when they exit," he said.

Magnum was taken private in 2008 in a deal worth RM4 billion as CVC wanted to invest in the company.

Gaming is MPHB's main core business, contributing 80 per cent of its revenue.

Lau said MPHB has no plans to take the gaming business overseas as it wants to focus on growth in Malaysia.

"Malaysia alone is a big market for us. We are looking at organic growth now," he said.

Magnum, set up in 1968, is the largest four-digit (4D) gaming operator in the country. It was the first private company to get a licence to promote, operate and manage 4D numbers forecast betting in Malaysia.

Magnum reported revenue of RM3 billion last year.

In the first quarter ended March 31 2010, the gaming business recorded pre-tax profit of RM93.5 million, up 32.23 per cent from the previous corresponding quarter. Revenue was RM919.1 million.

By Sharen Kaur