Wednesday, June 6, 2012

Sports Toto plans listing in Singapore


KUALA LUMPUR: Tan Sri Vincent Tan’s Berjaya Sports Toto Bhd (BST) plans to spin off Sports Toto Malaysia Sdn Bhd (STM) into a business trust, with the intentions of listing the said trust on the Singapore stock exchange in a deal valued at more than RM6 billion.

The plan comes just days after Business Times reported that the billionaire was planning to relist MOL Global Group by as early as next year.

The tycoon had taken MOL Group, which owns Friendster, private five years ago.

Vincent Tan indirectly owns some 53 per cent of BST, whose wholly owned subsidiary STM is regarded as the jewel in the crown of the Sports Toto family.

STM is the largest number forecast operator in the Malaysia both in terms of number of outlets and product offering.

The company, which is the sole licensed lotto operator in Malaysia, generates RM3.27 billion in sales yearly.
BST shares were suspended yesterday pending the announcement.

BST was last traded at RM4.25 a share, giving it a market capitalisation of RM5.74 billion.

The deal unveiled yesterday, however, valued BST higher, as the trust might have a so-called indicative valuation of RM5.9 billion to RM6.5 billion based on its cash flow, the company said in a statement to the stock exchange.

In a nutshell, BST will divest STM to STMTrust for RM6 billion, which will be done by issuing trust units and a promisory note.

Under the deal, STM-Trust will issue 4.43 billion trust units at S$0.50 (RM1.24) a unit, while some RM527.4 million will be settled via the issuance of a promissory note, also by STMTrust.

The initial public offering will involve a up to one billion STM-Trust units in total, representing about 20.46 per cent of the STM-Trust.

This will be done via an offer for sale of up to 540 million trust units by Berjaya Sports Toto and issuance of 460 million new units by STM-Trust.

The money raised by STM-Trust via the issuing of new units will be used to settle the RM527.4 million promissory note, and to defray expenses of the issue and for working capital.

"The board is of the opinion that shareholders will benefit in terms of better valuation in the long term. STM-Trust will focus on gaming activities, where it can leverage on its core expertise and experience.

This singular objective should enhance transparency for investment managers and research analysts to track the performance of the business," said Berjaya Sports Toto chief executive officer Datuk Robin Tan Yeong Ching.

He added that shareholders could expect to receive special cash dividends from net proceeds to be raised from the exercise.

"Post-IPO, Berjaya Sports Toto will retain an almost 80 per cent economic interest in STM via STM-Trust. The board may consider distributing the majority or all of the units to shareholders of Berjaya Sports Toto as and when it is able to do so legally so that shareholders can benefit directly from the distributions and growth of STM-Trust."

The proposal will require approvals of the Malaysian regulators, including the Finance Ministry and Bank Negara Malaysia, Singapore authorities and Berjaya Sports Toto shareholders and others.

Maybank Investment Bank (Malaysia) and Maybank Kim Eng Corporate Finance (Singapore) have been retained as adviser to BST and issue manager and adviser for the IPO, respectively.




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