JF Apex Securities merges with Mercury Securities


Apex Equity Holdings Bhd and its wholly owned subsidiary, JF Apex Securities Bhd, have entered into a business merger agreement with Mercury Securities Sdn Bhd in a deal worth RM140 million.

In a filing yesterday, Apex said the merger will see the transfer by Mercury Securities to JF Apex of its stockbroking, corporate advisory and other related businesses, together with the requisite business assets and business liabilities.

The proposed merger represents a major strategic plan of Apex to transform itself into a significantly larger player in the stockbroking industry in Malaysia with added new revenue streams from corporate advisory and proprietary trading currently undertaken by Mercury Securities, as an impetus to remain competitive in the current challenging environment.

“The deal will enable Apex to gain an immediate access to the corporate advisory business, tapping the track record, capacity and capabilities of Mercury Securities’ corporate finance team which was ranked by Bloomberg first in merger and acquisition deal counts for two consecutive years in 2016 and 2017, and as at Oct 31, 2018.

“JF Apex can also capitalise on cross-selling opportunities for its corporate clients who require corporate advisory services such as tapping the equity capital markets,” it noted in an exchange filing yesterday.

Apex said the consideration shall be satisfied in three tranches. The first tranche of RM22 million cash shall be satisfied in full within three market days from the unconditional date.

The second tranche of RM92 million shall be satisfied in full within 10 market days from the unconditional date by way of an issuance of 100 million new Apex shares, credited as fully paid, to Mercury Securities or any parties nominated by Mercury Securities, at an issue price of 92 sen per share.

The third tranche of RM26 million shall be satisfied in full within 10 market days from the unconditional date by way of cash. Apex said the cash payments shall be financed with the proceeds to be raised from the proposed private placement worth RM18.8 million and internally generated funds of RM29.2 million.

The company has entered into subscription agreements with its placees — including Tay Thiam Song, Chua Ching Siang, Yeo Soo Sia @ Yeo Soo Seng, among others — for a proposed private placement of 20 million placement shares at a subscription price of 94 sen each.