Off-Market Trades: Sunway, Berjaya Auto, Masterskill Education Group, K-One Technology and Chin Well Holdings

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SOME 668.54 million shares worth RM1.95 billion changed hands off market in blocks of at least 500,000 from Nov 5 to 11.

Sunway Bhd saw several large transactions totalling 163.93 million shares or a 9.49% stake done off market on Nov 5. The RM524.58 million worth of shares were traded at RM3.20 apiece or slightly lower than the stock’s closing price of RM3.23 on that day.

According to separate filings with Bursa Malaysia on Nov 7, the parties involved in the Nov 5 transactions include AmanahRaya Trustees Bhd and the Employees Provident Fund (EPF), which acquired 86.44 million and 24.87 million shares respectively.

The seller of the shares was GIC Private Ltd, which ceased to be a substantial shareholder in Sunway after disposing of 150.67 million shares on Nov 5.

The construction and property conglomerate is proposing to spin off its construction arm by early next year. Under the terms of the exercise, existing shareholders of Sunway are entitled to one share of the newly listed construction company for every 10 shares held.

Berjaya Auto Bhd saw 61.83 million shares or 7.65% equity interest transacted between Nov 7 and 11. According to a Nov 11 filing, part of the disposals was attributed to Berjaya Corp Bhd, which sold 39.1 million and 10.96 million shares on Nov 7 and 10 respectively.

It is worth noting that the transactions were priced at RM3.20 per share, representing a steep discount to Berjaya Auto’s market price. The stock closed at RM3.44 last Tuesday.

The automobile and auto parts distributor has seen a resurgence in buying interest due to the highly positive target prices issued by several research houses recently. For example, RHB Research and AmResearch have a fair value of RM4.50 and RM4 respectively for Berjaya Auto.

Masterskill Education Group Bhd (MEGB) saw a 9.72% stake traded on Nov 6 and 7 at 60 sen apiece. The block trades, which involved 39.85 million shares, were worth RM23.4 million at the transacted price, which was near MEGB’s closing price of 61 sen on Nov 7.

In a Nov 10 filing with Bursa, MEGB announced that Datin Seri Carline A Johnson D’Cruz disposed of 20 million shares on Nov 6. Another filing showed Raphia Ltd emerging as a substantial shareholder of MEGB, after having accumulated 61.15 million shares as at Nov 7.

Raphia is a subsidiary of Malaysian private equity firm Creador, which is partnering SMRT Holdings Bhd in acquiring a substantial stake in MEGB. The proposed share acquisition could result in the two having to extend a mandatory takeover offer for all remaining shares that they do not own.

In another notable trade, 42.5 million shares of K-One Technology Bhd were traded in a single transaction on Nov 7. The shares, which were priced at 37 apiece, represented a huge discount to K-One’s closing price of 52 sen on the same day.

According to a filing with Bursa, three of K-One’s directors were behind the disposal. The announcement mentioned that the buyers of the shares could be institutional investors, which may explain the extended rally in K-One’s shares. Between Nov 3 and its Nov 12 close of 51 sen, the stock gained 42%.

Also worth noting are the 9.14 million shares or 3.35% stake of Chin Well Holdings Bhd traded in three separate deals on Nov 5. Five million of the shares were traded at RM1.60 apiece while the remaining 4.14 million shares were done at RM1.50 apiece. The identities of the buyers and sellers have not been announced.

According to a Nov 5 announcement, Chin Well is proposing to acquire Asia Angel Holdings Ltd for RM47.5 million via the issuance of 27 million new shares at RM1.45 apiece, plus a cash payment of RM8.3 million. Asia Angel currently holds a 40% stake in Chin Well Fasteners (Vietnam) Co Ltd, a key subsidiary of the parent company.

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This article first appeared in The Edge Malaysia Weekly, on November 17-23, 2014.