PETALING JAYA: Star Media Group Bhd shareholders have rejected the group’s proposal to sell properties to its sister company Matang Bhd for RM33 million in a share plus cash deal.
In a filing with Bursa Malaysia, the group announced 46% of shareholders present at its virtual extraordinary general meeting (EGM) this morning holding 81.7% of voting shares rejected the resolution, while 53% of shareholders holding 18.3% of voting shares supported the motion.
MCA, which holds 43.23% of Star Media and 17.15% of plantation group Matang, did not vote as it is an interested party due to its shareholdings in both companies.
The proposed sale included two units of double-storey semi-detached factories and a warehouse annexed with a one-and-a-half storey office building in Shah Alam.
The related party transaction (RPT) would have seen Matang issuing 357 million new shares at 8.09 sen apiece to Star Media, resulting in it having a cross-holding of 13% in Matang.
The remaining purchase consideration would include a cash payment of RM4.12 million from Matang.
Star Media previously said the land and building disposals will see it booking a net pro forma gain of RM15.6 million, or approximately two sen profit per share.
The land, where construction works began this month, is located within the Star Business Hub, an industrial development project in Bukit Jelutong, Shah Alam. The group had ventured into property development at the start of this year.
Star Media group CEO Alex Yeow was saddened that the resolutions were not carried out. “But it’s good to know that after the clarification from us during the Q&A session, more minority shareholders understood the actual situation,” he said.
Star Media non-executive chairman Chor Chee Heung said the proposal to build the properties before selling it to Matang provides “an accessible platform for diversification initiatives”.
The taking up of a 13% stake in Matang would have given the company exposure to the plantation sector.
“We feel that by developing the land, it will bring Star Media more benefits as the group will derive higher profits than merely disposing of the land to create long-term shareholder value,” Chor said during the virtual EGM.
Sceptical minority shareholders
Some Star Media minority shareholders, including The Edge owner Tong Kooi Ong, have been critical of the proposed deal with Matang.
He had questioned the deal in his column titled “Star Media Group: An unreasonable, value-destructive related-party transaction with Matang” in the latest issue of The Edge weekly. Tong together with The Edge acquired a 5.42% stake in Star Media last month.
He noted that Matang is one of the most expensively priced plantation stocks on Bursa Malaysia.
“It is a very small plantation company with only 1,094ha of plantation estates, located primarily in Ledang and Segamat, Johor. It simply does not have the scale to be an efficient producer.
“If Star wants an exposure to plantation, it would be far better off buying Sime Darby Plantation, United Plantations and a dozen others,” the article said.
At the close of trade, Star Media shares gained 2.5 sen or 5.95% to 44.5 sen, valuing the group at RM329 million, while Matang was up half-a-sen or 5.88% to nine sen, giving it a market capitalisation of RM215 million. - FMT
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