Kenanga IB to acquire Libra Invest for RM50.1m

By FARA AISYAH / graphic by TMR

Kenanga Investment Bank Bhd’s (Kenanga IB) wholly owned subsidiary, Kenanga Investors Bhd (KIB), has entered into a conditional share purchase agreement with ECM Libra Financial Group Bhd to acquire the entire issued share capital of its fund management arm Libra Invest Bhd for a provisional purchase consideration of RM50.1 million.

The final purchase consideration of the 6.5 million ordinary shares will be based on the net asset value of Libra Invest on the last day of the month preceding completion date and a premium of RM35 million.

“We are excited about the prospects of this transaction which affirm our ambition and commitment for growth, and intention to broaden our footprint in the area of asset and wealth management,” Kenanga IB group MD Datuk Chay Wai Leong said in a statement yesterday.

“This highly complementary strategic acquisition is expected to propel KIB’s asset under management over the RM10 billion mark, enhancing its position as one of Malaysia’s leading unit trust and asset management companies.

“We are looking forward to a seamless merger process, and subject to regulatory approvals, we aim to conclude this exercise by the third quarter of 2019 (3Q19),” he added.

In an exchange filing yesterday, the group stated that the purchase consideration shall be satisfied by cash by KIB, via loan from Kenanga IB for the sum of RM30 million; and balance from internally generated funds of KIB.

“Libra Invest is renowned for its exceptional fixed-income track record. Both our organisations share the same commitment towards investment excellence and client service, which will serve as a strong foundation for a smooth integration,” KIB ED and CEO Ismitz Matthew De Alwis said.

“With the combined high-performing investment teams and leading-edge products, clients and our business partners will have access to a broader selection of solutions, while enjoying enhanced overall customer experience,” he added.

Meanwhile, ECM Libra noted in an exchange filing yesterday that the proposed disposal provides an avenue for the group to unlock and realise the value of its investment in Libra Invest at an attractive premium.

The group is expected to recognise a pro forma gain on disposal of RM35 million based on the provisional disposal consideration and subject to the premium adjustment and differential net asset adjustment.

ECM Libra added that the provisional disposal consideration arising from the proposed disposal of RM50.07 million is intended to be utilised for reinvestment into hospitality business (RM49.63 million) and estimated expenses for the proposed disposal (RM440,000).