PETALING JAYA: Media Prima Bhd is expected to revise upwards its offer for The New Straits Times Press (Malaysia) Bhd (NSTP) shares it does not own by improving the swap ratio.

Sources said Media Prima would offer at least 1.1 Media Prima shares for every one NSTP share, marginally above its previous one-for-one offer.

“They are upping the offer from its original one Media Prima share for every NSTP share. The improved offer of 1.1 Media Prima shares for every one NSTP share will value NSTP at RM2.20 per share compared with RM2 previously. The revised offer could even go up to 1.2 Media Prima shares for every one NSTP share. Regardless, the offer will be upped to at least RM2.20 per NSTP share,” said a source.

“This is to help the acceptance rate for the offer. Institutional shareholders are believed to be okay with the previous offer but the retail investors were not that pleased.”  

Apart from a direct swap of shares, Media Prima in its proposal to privatise NSTP is also offering one Media Prima warrant for every five NSTP shares held.

It is learnt that there is not likely to be any change to the offer on the warrants.

In a further move to appease minority shareholders, sources said NSTP could also declare a special dividend.

If that happens, a big chunk of the money will go back to Media Prima, which is the major shareholder of NSTP.

Yesterday, both Media Prima and NSTP requested for a two-day suspension in the trading of their respective stocks pending an announcement. “The request for suspension is in view that the company will be making an announcement on the revision of the terms and conditions of the proposed offer,” noted Media Prima.

Media Prima’s proposed privatisation of NSTP is not well received by the minorities of the latter as it is less than half its book value and at 18.7% discount to its last traded price of RM2.46.

Even so, some have argued that NSTP’s shares had been trading below RM2 for a long time and had only started moving up lately because of the takeover rumours. NSTP’s average one-year trading price is RM1.35. This means, at RM2, the price is at a 48% premium to its one-year average price.

NSTP closed at RM2 on Tuesday, before its suspension, while Media Prima closed at RM1.70.


This article appeared in The Edge Financial Daily, November 12, 2009.