Malaysia Resources Corporation Berhad (MRCB) shareholders overwhelmingly agreed to acquire developer Nusa Gapurna Development (NGD) today despite being sued to stop the deal by Selangor state developer PKNS.
NGD had also rejected a bid by PKNS to buy the former's 70 per cent share in PJ Sentral, a project to revitalise the city next to Malaysia's capital Kuala Lumpur.
In today's EGM, 92 per cent of MRCB's shareholders voted to keep its offer of RM729 million for NGD including its stake in PJ Sentral development. The deal will increase the KL Sentral developer's land bank for future development.
"PKNS had earlier offered to buy NGD's shares (in PJ Sentral) at a higher price but it was rejected," said Wong Muh Rong from Astramina Advisory, the transaction adviser for the deal. NGD was reported to have declined the offer by PKNS on the basis that the latter doesn't have enforceable pre-emption rights.
"As far as NGD is concerned, they're just monetising their shares from PJ Sentral to MRCB," added Wong.
Both MRCB and NGD share a common shareholder, Malaysia's largest pension fund, the Employees' Provident Fund (EPF). PKNS had filed suit yesterday against MRCB and NGD on grounds that NGD has breached a shareholders’ agreement between the two companies with PJ Sentral and that the public-listed MRCB had "intentionally or recklessly procured a breach of the Shareholders’ Agreement".
Both defendants have yet to decide on the next course of action.
Meanwhile PKNS is keeping to its decision to have full ownership of PJ Sentral, a prime asset that's expected to fetch RM2.9 billion from its PJ Sentral Garden City project alone.
"We will exercise our pre-emptive right which is by obtaining 70 per cent shares in NGD. At the same time we are maintaining our 30 per cent shares," PKNS Holdings general manager, Noor Hisham Mohd Ghouth said in an email to The Malaysian Insider. - June 20, 2013.
MORE TO COME.