Boustead Holdings Shares Soar After Takeover Proposal

Boustead Holdings Shares Soar After Takeover Proposal

Boustead Holdings Bhd. shares jumped Friday morning after a major shareholder proposed taking the Malaysian conglomerate private.

Shares in the company, an affiliate of the Malaysian military with holdings in the plantation, property and pharma sectors, soared 31% to 0.86 ringgit after resuming trading Friday morning, bringing year-to-date gains to about 37%. Trading in the stock was suspended Thursday afternoon pending the takeover offer announcement.

The gains came after Boustead’s major shareholder, the Armed Forces Fund Board, made a cash offer to acquire the 40.58% shares that it doesn’t already own in the company for MYR0.855 each. The fund, known as LTAT, is the pension fund serving members of Malaysia’s armed forces.

The offer price is at a premium to the shares’ last trading price of around MYR0.66 before Thursday’s suspension.

In a bourse filing, the company said the fund doesn’t intend to maintain Boustead’s listing status if the offer proceeds.

The offer is conditional upon approval from the Ministry of Finance and Bank Negara Malaysia.

The takeover proposal comes after Boustead posted a net loss of 402.3 million ringgit ($89.9 million) for the fourth quarter of 2022, swinging from a net profit of MYR78.6 million a year ago. The reversal was due mainly to its pharmaceutical unit Pharmaniaga Bhd., which took a MYR552.3 million writedown on slow-moving inventory of Covid-19 vaccines.

Boustead also has shares in Affin Bank Bhd., Boustead Plantations Bhd., and Boustead Heavy Industries.

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