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Tuesday, September 27, 2011

BRDB will sell prized assets via open tender

PETALING JAYA: In a surprise development, Bandar Raya Developments Bhd (BRDB) has ceased all negotiations to sell its prized assets to its major shareholder, Ambang Sehati Sdn Bhd, and is now opting instead to dispose of them via an open tender.

In an announcement to Bursa Malaysia, BRDB said its board of directors had met with representatives of Ambang Sehati to discuss “misconceptions, views and concerns of the various stakeholders which have been raised, subsequent to the announcement on Sept 19, 2011 in relation to the proposed disposal” and “expressions of interest received from credible parties that have been communicated since the aforesaid announcement.”

BRDB said following the meeting, both it and Ambang Sehati had mutually agreed to call off the latter's offer to acquire BR Property Holdings Sdn Bhd, which owns Bangsar Shopping Centre, Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall, for a sum of RM914mil.

However, Ambang Sehati will be invited to participate in the tender. Ambang Sehati is the investment vehicle of BRDB chairman Datuk Moiz Jabir Mohamed Ali Moiz as well as BRDB's major shareholder with 18.88%.

BRDB also said it had decided to appoint an independent international property valuation firm to manage the tender exercise, adding that an announcement on the tender would be made at an appropriate time.

In a statement, BRDB CEO Datuk Jagan Sabapathy said: “The board remains convinced that our earlier decision to accept the offer as well as the option not to conduct an open tender exercise was fair and appropriate at that time. However, the board has subsequent to its announcement of acceptance of Ambang Sehati's offer on Sept 19, received expressions of interest from credible parties for the four assets.

“In view of this, the board after a discussion with Ambang Sehati mutually agreed that under these circumstances, it would be best to put the assets up for sale by way of a tender exercise.”

The proposed sale of BR Property, which was announced last Monday, has drawn much public interest over several issues including the valuation of the four assets and the crucial 23.6% block of shares in BRDB held in a nominee account by Credit Suisse.

The 23.6% block is said to be quite influential in deciding if the deal goes through, as explained by the Minority Shareholder Watchdog Group.

This is based on the assumption that the block amounts to 30% of total disinterested shareholders of BRDB and may comprise 50% of votes of shareholders who actually turn up to vote on the matter, which requires only a simple majority to be passed.

The identity of the beneficial owners of the 23.6% block in BRDB is not yet known, but the company had told StarBiz prior to its announcement to Bursa Malaysia that it was in the process of ascertaining this.

“We are attending to the query by Bursa Malaysia and will be writing to the relevant nominee companies for details of their shareholdings,” a BRDB company official said.

Under Section 69(0)(8) of the Companies Act, Bursa and the Securities Commission have the power to direct companies to disclose the identity of the beneficial shareholders of substantial blocks of shares in the company. Section 69 also empowers the affected issuer itself, meaning BRDB, to request for details on the beneficial owners from a trustee, which is Credit Suisse.

While Bursa Malaysia has yet to clearly state if it has invoked this power, reliable sources told StarBiz last week that the exchange had queried BDRB on this issue.

By The Star

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