GuocoLand (Malaysia) Berhad: Board Tables RM1.10/Share Privatisation Offer; Shareholders to Vote on Major Delisting Plan

Overview

GuocoLand (Malaysia) Berhad (“GLM” or “the Company”) has announced a potentially game-changing development: its controlling shareholder, GLL (Malaysia) Pte. Ltd. (“GLLM”), has formally proposed to privatise GLM via a selective capital reduction and repayment exercise. This move, if approved, will result in the delisting of GLM from Bursa Malaysia and full ownership by GLLM, a wholly-owned subsidiary of GuocoLand Limited (“GLL”) of Singapore.

The proposal, made pursuant to Section 116 of the Companies Act 2016, will be put to a vote by disinterested shareholders at an upcoming Extraordinary General Meeting (EGM).

Key Details of the Proposed Privatisation

• Offer Structure: GLM will undertake a capital reduction of RM269.45 million, cancelling 244,951,738 shares held by shareholders other than GLLM (“Entitled Shareholders”). Entitled Shareholders will receive RM1.10 per share in cash.
• Shareholdings: As at 18 March 2026, GLLM owns 65.03% of GLM, while Entitled Shareholders collectively hold 34.97%. After completion, GLLM will own 100% of GLM.
• Price Premium: The RM1.10 offer represents a premium of 17.65% to 54.52% over recent market prices and volume-weighted averages, and GLM shares have not traded at or above this price in the last five years.
• Delisting: GLLM does not intend to maintain GLM’s listing on Bursa Malaysia post-privatisation.

Rationale and Shareholder Impact

• Low Trading Liquidity: GLM shares are thinly traded, with an average daily volume of just 126,923 shares (0.06% of the free float) over five years. The proposal offers an exit at a significant premium for investors who may otherwise struggle to sell at fair value.
• Minimal Listing Benefits: GLM has not tapped equity markets for over a decade and has been incurring costs to maintain its listing. The move could streamline operations, enhance capital flexibility, and allow greater management focus.

Key Terms and Conditions

• Eligibility: The proposal is extended to all shareholders except GLLM, including eligible employees under GLM’s Executive Share Scheme and Value Creation Incentive Plan, provided they hold shares by the entitlement date.
• Voting: The proposal requires approval by a majority in number and 75% in value of disinterested shareholders present and voting at the EGM, with less than 10% of the votes cast against.
• Major Shareholders and Directors: All parties acting in concert with GLLM, including key directors and related entities, will abstain from voting.
• Funding: The proposal will be funded by advances from GLLM/GLL or available GLM funds. The advisers are satisfied with the financial capability for full cash settlement.
• Distributions: Any dividends declared after the proposal date but before completion will reduce the offer price accordingly; no such distributions have been declared to date.

Financial Effects and Metrics

• Share Capital: GLM’s share capital will fall from RM385.32 million (700.46 million shares) to RM115.87 million (455.51 million shares).
• Net Assets: Post-privatisation, net assets per share are projected to rise from RM2.08 to RM2.52, due to the cancellation of lower-priced shares.
• Earnings per Share: EPS is expected to increase from 2.81 sen to 3.74 sen per share post-privatisation, given the reduction in share count.
• Gearing: Gearing ratio will rise from 0.39x to 0.47x, due to the reduction in equity base.
• Price Ratios: The offer implies a price-to-book of 0.53x and a price-to-earnings of 39.15x, both at a premium to prevailing market valuations.

Additional Key Points for Shareholders

• Scheme Termination: GLM will terminate its employee share schemes once shareholder approval is obtained but before the High Court application for capital reduction.
• No Downstream Offer: The privatisation will not trigger a general offer for Tower Real Estate Investment Trust units held by parties other than GLM.
• Business Continuity Covenants: Until completion, GLM and its subsidiaries are restricted from major capital raising, issuing new shares, or undertaking major transactions outside the ordinary course of business without GLLM’s consent.
• Approvals Needed: The proposal’s execution is subject to the EGM vote, High Court order, any required financier and regulatory approvals, and is expected to complete in the first quarter of FY27.

Advisers

Maybank Investment Bank is Principal Adviser, and Kenanga Investment Bank is Independent Adviser to the disinterested shareholders.

Conclusion: Price-Sensitive and Shareholder Action Required

This proposal is highly price-sensitive, offering a significant premium to current and historical market prices. Shareholders must consider the delisting implications and the opportunity to realise value in a low-liquidity stock. Disinterested shareholders are urged to carefully review the Independent Adviser’s opinion ahead of the EGM and make an informed decision.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. Investors are advised to read the full circular and seek independent financial advice before making any decision. The author is not responsible for any investment actions taken based on this summary.

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