Billionaire Syed Mokhtar AlBukhary is offering 2.9 billion ringgit ($714 million) to buy out the minority shareholders of MMC Corp., betting that the ports and energy conglomerate will sustain its earnings recovery.
Under the proposal, AlBukhary’s Seaport Terminal (Johore) Sdn Bhd, which holds a 51.8% stake in MMC, is offering to buy the MMC shares it doesn’t own for 2 ringgit a share through a selective capital reduction exercise. That’s more than 50% premium from the last trading price of MMC before trading was suspended on Thursday afternoon.
AlBukary’s offer is quite timely, considering MMC’s improving earnings trajectory. The company reported last month a 92% jump in first-quarter pre-tax profit to 221 million ringgit, bolstered by increasing contributions from the Port of Tanjung Pelapas.
DBS is recommending that minority MMC shareholders accept the offer. “While we see deep value in the stock, coupled with its improving earnings trajectory, we deem the privatization price of 2 ringgit as fair and advise investors to accept the offer,” DBS Group Research said in a research note.
MMC’s ports to continue to sustain their growth, with PTP’s throughput likely exceeding 10 million 20-foot equivalent units (TEUs) of containers this year, after handling 9.7 million TEUs in 2020, according to DBS. The growth will be driven by backlogs caused by the closure of the Suez Canal earlier this year and congestion at rival ports in Singapore and Malaysia, it said.
AlBukhary, 69, was ranked No. 18 on the Malaysia Rich List that was published on Thursday. His net worth of $1.2 billion is based primarily on his holdings in automotive firm DRB-HICOM as well as MMC, which has interests in ports, logistics, energy, construction and engineering.