The rumours had finally come to an end. It's now confirmed that Public Bank Bhd (PBB) is going to acquire 44.15% stake in LPI Capital Bhd (LPI) from the family of the late Tan Sri Teh Hong Piow.
Both companies were founded by the late Tan Sri Teh, who passed away in 2022. LPI Capital is mainly in general insurance business under the brand name of Lonpac.
Lonpac currently has 21 branches throughout Malaysia and 1 branch in Singapore. LPI also operates in Cambodia through a 45%-owned associated company. The remaining effective equity interest of 55% in Campu Lonpac Insurance Plc is held by PBB.
The Proposal
- Acquirer : Public Bank Bhd
- Vendor : Family of the late Tan Sri Teh Hong Piow
- Subject : 44.15% stake of LPI Capital Bhd
- Offer Price : RM9.80 per share
- Offer Value : RM1.72 billion cash 💢
- At RM9.80 per share, the acquisition price is a discount of 25% to LPI’s last price of RM13 before the stock was suspended from trading for the announcement.
- The implied PBR of 1.71x computed based on the audited consolidated NA per LPI Share as at 31 December 2023 of RM5.73 is above the range of the PBR of the Comparable Companies but within the range of the Comparable Transactions
- The implied PER of 12.41x computed based on the audited consolidated EPS of LPI for the FYE 31 December 2023 of RM0.79 is above the simple average but within the range of the PER of the Comparable Companies
- The implied EV/EBITDA Multiple of 8.88x based on the audited EBITDA of LPI of RM408.59 million for the FYE 31 December 2023 is below the simple average and within the range of the EV/EBITDA Multiple of the Comparable Companies
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