The exercise involves carving out MPHB's non-gaming business for a listing on the Main Market of Bursa Malaysia through a special purpose vehicle, with the entire listing proceeds to be distributed back to MPHB shareholders.
MPHB will also continue disposing a few of its other non-core assets.
Analysts are generally positive on the demerger exercise given that it accelerates the unlocking of value in the company.
“The demerger move is poised to narrow the holding company discount attached to MPHB at present.
“It also allows the existing shareholders to allocate their funds more efficiently by either investing in MPHB, which will become a pure high dividend yielding play or investing in SPV, which continues to engage in assets disposal,” said one gaming analyst.
A HwangDBS analyst said that the non-gaming businesses was worth about RM2.5bil and could translate to potential capital repayment of up to RM1.71 per share.
She has a sum-of-parts target price of RM3.80 for the stock.
At its current share price, MPHB's business is valued at 6.5 times (x) to 8.7x of 2013 earnings of RM416mil, versus Berjaya Sports Toto's 13.4x. - By Tee Lin Say, thestar.com.my
The comments above do not represent a recommendation to buy or sell.
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