KUALA LUMPUR – Star Media Group Bhd is selling its 52.51% stake in Cityneon Holdings Ltd for S$115.61mil or RM360.18mil cash, a transaction that is valued at almost 33 times the earnings of the Singapore listed events and exhibition company.
According to an announcement on Bursa Malaysia on Friday, the buyer Lucrum 1 Investment Ltd and Star Media Group arrived at the price on a willing-buyer willing seller basis, after taking into consideration the latest audited net asset of Cityneon for the FY ended Dec 31, 2016 of S$69.29mil or net asset per Cityneon share of 28.32 cents.
The disposal would allow Star Media Group to realise a gain on disposal of about RM214.07mil.
For the financial year ended Dec 31, 2016, Cityneon recorded a profit after tax after minority interest of S$6.68million or an earnings per Cityneon share of 2.73 cents.
“Based on the earnings of Cityneon for the financial year ended December 2016, the disposal represents an implied price-to-earnings ratio (PER) of approximately 32.97 times,” it said.
It said the proposed disposal allows Star Media to unlock its investment in Cityneon at a price-to-book ratio (PBR) of 3.18 times and enables it to concentrate on the expansion of its primary business activities.
It said the gain on disposal would improve its cash reserves which will allow it to support its existing businesses and working capital requirements.
Cityneon, a full service ideas agency, has five business segments – events, exhibitions, experiential environment, interior architecture, and intellectual property rights (IPR).
The IPR segment was created through the acquisition of immersive attractions company Victory Hill Exhibitions Pte Ltd in 2015, which has the rights to hold the successful Marvel Avengers S.T.A.T.I.O.N interactive exhibition.