Speculations over Tony Tiah’s plan for TA Enterprise

KUALA LUMPUR (July 7): Datuk Tony Tiah Thee Kian earlier this week launched a mandatory takeover offer (MGO) for TA Enterprise Bhd at 66 sen per share after acquiring 14.33 million shares or a 0.84% stake in the stockbroking firm for prices between 61 sen and 66 sen from the open market.

Following the acquisition, Tiah, who is the co-founder and non-executive chairman of TA Enterprise, holds 558.35 million shares or a 32.62% stake in TA Enterprise. Together with persons acting in concert (PACs) with him, who hold 7.89 million shares or a 0.46% stake in the group, Tiah and the PACs collectively own 566.24 million shares or a 33.08% stake in TA Enterprise.

The Edge business weekly in its latest issue reported that MGO has prompted speculation about Tiah’s plan for the company.

In a recent announcement to Bursa Malaysia, TA says Tiah intends to maintain the listing status of the company.

The Edge wrote that “the fact that the offer price is barely 5% above the market price also makes it apparent that Tiah has no intention to take it private, at least not for now”.

A corporate adviser noted to The Edge that the MGO could help Tiah consolidate his stake in TA.

The MGO also offers a timely exit. “Market sentiment is bad now. Investors who fear that they won’t be able to liquidate their shares would be willing to take up the MGO. It is a good opportunity for entrepreneurs who see deep value in the stock to increase their stake.

“I believe it might not be that difficult for Tiah’s MGO to meet the 50%+1 requirement that will make the offer unconditional,” a dealmaker told the weekly.

TA Enterprise’s “prized possessions” are its landbank and properties in TA Global.

The group is among the landowners that own sizeable prime land in the KLCC area. It also owns five-star hotels and land in Canada, Australia and China, wrote The Edge.

The properties and land listed in the company’s 2017 annual report are carried at net book value, indicating that they could be worth much more should the company’s auditor revalue the assets, said the business weekly.

Another corporate adviser told The Edge “that should Tiah manage to raise his holding in TA to 51% or more, he would be able to tighten his grip on the company by increasing his stake to 75% without any obligation to make an MGO under the listing requirements”.