Monday, June 7, 2010


The following report by Bernama, our 'trusted' national news agency:
KUALA LUMPUR, May 12 (Bernama) -- Berjaya Corp Bhd (BCorp) is set to acquire the 70 per cent majority stake in Malaysia's first legalised sports betting operation, Ascot Sports Sdn Bhd, for RM525.0 million in cash.

The company has entered into a conditional sale and purchase agreement with Tan Sri Vincent Tan Chee Yioun, a major shareholder of BCorp for the 56.0 million shares in Ascot Sports.

Tan owned 70 per cent of Ascot with the balance held by his son, Datuk Robin Tan Yeong Ching, BCorp said in a filing to Bursa Malaysia Wednesday.

To underscore the value of Ascot Sports, Tan has agreed to guarantee that the company will make cumulative profit after tax of at least RM375.0 million for the first three years of operations.

To back this profit guarantee, Tan has offered to deposit RM81.25 million worth of listed securities and Berjaya Corp will withhold RM125.0 million cash from the total consideratiom of RM525.0 million, which will be released annually upon achievement of profits proportionate to the guarantee.

Hence, the initial consideration will be RM400.0 million.

BCorp is also proposing to undertake a renounceable rights issue up to RM614,455,933 nominal value of Irredeemable Convertible Unsecured Loan Stocks (ICULS) on the basis of one RM1.00 nominal value of ICULS for every eight BCorp shares held on an entitlement date to be determined later.

The proposed rights issue is to part finance the proposed acquisition and/or for working capital requirements and bank borrowings.

A portion of the funds raised will be used to pay the initial consideration of RM400.0 million with the remaining to be deployed for working capital of the group.

Tan has undertaken to subscribe to his and his private companies' entitlements in full which would amount to at least RM400.0 million and Tan will not net in any cash as he will reinvest the entire initial consideration to be received to honour his rights issue obligations.

Ascot Sports has a paid-up share capital of RM80.0 million comprising shares of RM1.00 each and based on the sale price, the price per share is RM9.375.

Ascot has been re-issued the sports betting license by the Finance Ministry which was first issued in 1987.

Ascot Sports has the first-right-of-refusal in the event the government decides to allow sports betting which it has now in view of the rampant illegal book making activities being conducted.


Today, Bernama reported:

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