Vincent Tan is busy juggling his holdings.
Market sources indicate that his Berjaya Land (BLand) has placed out 40m of Berjaya Sports Toto’s (BST) shares for RM190m or RM4.75 per share. This would effectively dilute BLand’s stake in BST by 3.2% from 50.7% to 47.5%.
Concurrently, Vincent has also placed out 15.6m shares (including Berjaya Corp and his other private companies). All these would collectively dilute his stake by 4.4% from 57.4% (direct 5.58%, indirect 51.85%) to 53.0%.
The placement exercise follows the 80 sen bumper dividends declared by BST in 4QFY09, including a 1-for-14 treasury shares distribution valued at 35 sen.
According to DBS, the placement was done at a 4.6% discount to BST’s last closing price and values BST at 13.6x FY11 PE. The price is close to DBS's dividend discount model value of RM4.83.
Why the need to do the juggling now?
Apparently, the net proceeds from the placement would be used for partial redemption of BLand’s RM848m 8% secured exchangeable bonds due in 2011 which bondholders can exercise a put option for early redemption on 15 Aug 09 at 100% nominal value.
Collectively, BLand would have RM667m in hand (including the Treasury shares receivable which may be placed out later should the need arise) for the potential bond redemption (79%).
DBS maintains a hold on BST, based on its DDM of RM4.80.
BST goes ex this Monday,13 July. Hopefully it can maintain it's price above the RM4.80 level
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