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Thursday, January 13, 2011

Analysts: No major issues over AP Land takeover

PETALING JAYA: Property analysts expect the proposal to take over Asia Pacific Land Bhd (AP Land) by its substantial shareholders, via a special purpose vehicle Low Chuan Holdings Sdn Bhd (LCH), will likely go through without any major issues.

“This is because the company is tightly held by its substantial shareholders, the owners of LCH, and there is no other substantial investor that holds more than 5% of the stake.

“Although the offer price of 45 sen reflects a 9.8% premium over AP Land's last traded price of 41 sen before the announcement on Monday, non- interested directors of AP Land would still have to consider the company's assets and outlook as well,” an analyst told StarBiz yesterday.

He said the lukewarm interest by investors in AP Land stock could be due to the financial performance of the company.

“But it has some interesting overseas asset compared to its local counterpart,” the analyst said.

AP Land, a property development and plantation company, is not covered by any research houses.

To recap, LCH, an investment vehicle of the Low Yat group that was set up to undertake this proposal, collectively holds a 33.98% stake in AP Land.

LCH, on Tuesday launched a takeover offer to acquire the entire business of AP Land for 45 sen per share or RM305.2mil. About RM201.5mil of the total will be satisfied via cash and the remaining would be an amount owed to AP Land.

This could reflect that the company will be taken private post acquisition.

AP Land's financial performance for the past five years has been weak.

For the first nine months of 2010 ended Sept 30, it reported a net loss of RM3.8mil compared to a net profit of RM1.5mil in the same period the previous year.

It had also suffered net losses in the financial years 2005, 2006, 2007 and 2009. But, it was reported that AP Land has a net tangible assets of about RM700mil.

Among the group's current property development projects locally are high-end development in the heart of Kuala Lumpur known as myHabitat, Bandar Tasik Puteri a township development project in Rawang and Penang Island Bay Resort a self- contained township located within the Batu Ferringhi.

Internationally, the group launched a commercial development project in China's Changshu City, marking its first foray into the country.

AP Land is also undertaking a residential development project in the Niseko region of Hokkaido, Japan.

By The Star

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