MRCB’s 80% stake buyout in Bukit Jalil Sentral Property from EPF deemed 'fair and reasonable'

• Kenanga IB highlighted the strategic location of the lands—about 1.9km from MRANTI Park in Bukit Jalil, a key hub for hyperscale data centre development—and their strong connectivity to major highways and public transport networks, including the Sri Petaling and Bukit Jalil LRT stations and the Sungai Besi MRT station.

KUALA LUMPUR (Nov 25): An independent adviser has advised non-interested shareholders of Malaysian Resources Corp Bhd (KL:MRCB) to vote in favour of the group’s proposed RM1.58 billion cash acquisition of the remaining 80% stake in Bukit Jalil Sentral Property Sdn Bhd (BJSP) from the Employees Provident Fund (EPF).

In an independent advice circular filed with Bursa Malaysia on Tuesday, Kenanga Investment Bank Bhd (Kenanga IB) said the transaction is “fair and reasonable” and is not detrimental to the interests of non-interested shareholders.

BJSP was set up to develop the 76.14-acre Bukit Jalil Sentral project. MRCB’s plan to buy out EPF came as the two parties were unable to reach an agreement on a review of the project's development plan.

BJSP owns three parcels of land: a 97,720 sq m recreational park, and two vacant parcels measuring 37,320 sq m and 173,800 sq m.

Kenanga IB said it assessed MRCB's purchase consideration against several benchmarks:

• IVPS Property Consultant Sdn Bhd’s valuation of the lands at RM2.06 billion as at July 10
• BJSP’s unaudited net asset value of RM1.4 billion as at June 30
• the principal and cumulative dividends of the redeemable preference shares—class A (RPS-A) accrued up to July 10, and
• KPMG Corporate Advisory Sdn Bhd’s valuation of the sale shares at RM1.57 billion, based on adjusted net asset value.

Having reviewed the valuation methodologies made by both independent valuers, Kenanga IB concluded that the consideration falls within a reasonable valuation range. 

Upon completion, BJSP will become a wholly owned subsidiary of MRCB, allowing the group full control over the development of the lands and enabling it to capture all future returns. The acquisition includes the 1.13 billion RPS-A, which carries a dividend rate of 7% per annum in perpetuity. 

Kenanga IB highlighted the strategic location of the lands—about 1.9km from MRANTI Park in Bukit Jalil, a key hub for hyperscale data centre development—and their strong connectivity to major highways and public transport networks, including the Sri Petaling and Bukit Jalil LRT stations and the Sungai Besi MRT station.

It added that the favourable outlook for the Malaysian property market further supports the rationale for the acquisition.

Shareholders will vote on the proposal at its extraordinary general meeting on Dec 18.

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