S P Setia to Acquire I&P Group, Forming One of Malaysia’s Largest Property Company

S P Setia to Acquire I&P Group, Forming One of Malaysia’s Largest Property Company

KUALA LUMPUR, APRIL 14: Property Developer S P Setia will be one of the largest property company in Malaysia after its move to acquire I&P Group Sdn Bhd from state investment fund Permodalan Nasional Bhd (PNB).

Both companies together with Amanahraya Trustees Bhd as trustee for Amanah Saham Bumiputera entered into a non-binding Memorandum of Intent (MOI) to commence negotiation on the proposed acquisition, which has 4,263 acres of landbanks estimated within the range of RM3.5 billion to RM3.75 billion.  

Upon successful completion of the Proposed I&P Acqusition, the company will have increased its prime landbanks in central Klang Valley and Johor Bahru, which is close to 10,000 acres.

“We are truly excited with this corporate exercise embarked upon by our group. We believe that the acquisition of I&P Group will allow us to tap the synergistic opportunities that I&P Group could offer given that its landbanks are located within the growth areas in the central part of Klang Valley and Johor Bahru, where our company has charted successes and are a stronghold of its ‘Setia’ brand. The synergy between S P Setia and I&P Group is obvious.

“Further, based on information disclosed, I&P Group has a strong balance sheet, with very low debt level, which is an excellent platform to facilitate future growth and execution,” said Datuk Khor Chap Jen, President and Chief Executing Officer (CEO), S P Setia.

Moreover, Datuk Abdul Rahman Ahmad, President and Group CEO, PNB, believes that the proposed transaction is in line with its recently announced Strategic Plan to transform the performance of its strategic and core companies as well as rationalise and enhance PNB’s property investments.

“As the major shareholder of both companies, we are pleased to see the coming together of S P Setia and I&P Group. The two groups’ landbanks are in close proximity whilst their respective customer base is highly complementary, which shall facilitate greater value creation.

“PNB will be supportive of S P Setia’s plan on how best to finance the acquisition and is ready to provide the necessary capital support to ensure the success of the transaction. As a long term investor, we see this as another opportunity to enchance shareholders’ value and increase future dividend yields for the benefit of our unitholders,” said Abdul Rahman.

Additionally, S P Setia via its wholly owned subsidiary KL East Sdn Bhd entered into a conditional sale and purchase agreement to acquire a parcel of land measuring approximately 342.5 acres located in Bangi, Selangor, known as Bangi Estate (Bangi Land) from Sierramas Development Sdn Bhd for RM447.58 million or RM30 psf plus profit sharing of up to RM3 psf.

“Bangi Land is also located within a 5km radius from our exisiting two sister mixed development townships, namely Setia Ecohill and Setia Ecohill 2. With our good track record, we are confident of developing Bangi Land into another success story for us to be proud of,” said Khor.

Bangi Land is planned for a mixed development township comprising residential (eg: apartments, linked houses and cluster houses) and commercial (eg: shops and shop offices) components and is expected to have a gross development value (GSV) of approximately RM2.74 billion.

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