Landmarks Proposes Placement

Landmark is trying to kill two birds with one stone by proposing to place new shares of Rm45.5 million based a price of Rm1.54 per share  to fend off a takeover and to reduce its debt .This amount represents one tenth of its net borrowing. Based on 8.25% interest rate,there might leads to an estimated interest savings of Rm2.06 million per annum

Reported in BT (5/8/06)
“Property firm Landmarks Bhd,which is rumored to be facing a takeover bid,has proposed to sell new shares to potential institutional investors to raise funds and cut debt.
Landmarks shares closed at RM1.79 yesterday after hitting a 52-week high of RM1.80 earlier in the day. The company’s stock has gained 74 per cent so far this year,outperforming the market’s 4.2 per cent rise in the same period outperforming the market’s 4.2 per cent rise in the same period. 

The rumors on the takeover:

• Datuk Zakaria Abdul Hamid and Lee Tuck Fook,who were both appointed to the board last month,control Zimulia Sdn Bhd,which holds 18 per cent of Landmarks. Dynaura Trading Sdn Bhd,which currently has an 8 per cent stake is also said to be on their side.
• The placement could raise speculation that one group is trying to consolidate their control over the company.
• Press reports have rumored that the aggressor could be property developer Datuk Syed Mohd Yusof Tun Syed Nasir. He has bought 5.7 per cent of Landmarks. However,sources close to him deny this”

Incidentally,in Malaysia,private placements have been used to try fend off takeovers before. An example is fast food firm KFC Holdings (Malaysia) Bhd which tried to place out new shares amid a takeover battle for the group last year.

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