Boustead Tumbles Most in Year on Scrapped Take-Private Offer

Boustead Holdings Bhd. suffered its biggest decline in almost a year after its major shareholder abandoned an offer to take the Malaysian conglomerate private.

Lembaga Tabung Angkatan Tentera, the country’s armed forces pension fund that owns about 59.4% of Boustead, said Tuesday that it has decided not to proceed with the offer as the pandemic-triggered economic challenges and lockdowns added uncertainties. The cancellation also came as the country’s securities watchdog refused to further extend the deadline. The announcement confirmed an earlier Bloomberg News report.

Shares in Boustead resumed trading on Wednesday and slumped 14.1% at the close, the most since March 2020. The stock briefly crashed as much as 19.7% in the steepest intraday tumble in 23 years. The Malaysian benchmark stock index rose 0.2% in a second day of gains.

The military fund in May last year confirmed it was weighing options for Boustead after Bloomberg News first reported the take-private plans. After the offer was scrapped, LTAT said it will continue to support Boustead’s plan to pursue its turnaround plans, while the fund will keep reviewing its options to enhance the value of its portfolio.

LTAT was set up in 1972 to provide retirement and other benefits to members of Malaysia’s military. Under the superannuation plan, members are required to contribute 10% of their monthly salary while the government contributes 15%, according to its website. The fund has roughly 9.5 billion ringgit ($2.3 billion) in assets under management, according to a report by state news agency Bernama on its 2019 financial results.

Among the armed forces fund’s largest holdings are its stake in Boustead and a 35% stake in Affin Bank Bhd., according to data compiled by Bloomberg. The fund paid an annual dividend of only 2.5% in 2019, and 2.0% in 2018, its lowest levels compared with a minimum of 6% paid over the past four and a half decades. The fund hasn’t declared any dividend for 2020.

©2021 Bloomberg L.P.

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