YTL Corporation Berhad (YTL) has announced its subsidiary, YTL Cement, will acquire an 81.24% stake in SGX-listed NSL Ltd for SGD227.6 million (RM792.3 million), which represents a 5.6% premium over NSL's net tangible assets (NTA) per share. This acquisition is set to enhance YTL Cement's industrialised building system (IBS) capabilities and facilitate entry into new markets including Singapore, Dubai, Finland, and Malaysia, aligning with the ongoing boom in data centres and industrial buildings.
MIDF Amanah Investment Bank (MIDF) maintains a BUY recommendation on YTL, with an unchanged target price of RM4.19. The bank highlights the strategic synergy between YTL Cement's existing operations and NSL's IBS expertise, noting that the acquisition will drive future growth and market expansion.
On the other hand, CGS International Stock Broking House (CGS) reiterates a HOLD rating with a target price of RM3.88. While acknowledging the strategic benefits of acquiring NSL, CGS highlights potential risks including the slight increase in net gearing and the challenges of integrating NSL's operations.
YTL's planned acquisition will be funded through a combination of internal funds and borrowings, with the transaction expected to complete by the fourth quarter of 2024. The acquisition price of SGD0.75 per share will require YTL Cement to make a mandatory unconditional cash offer for all remaining NSL shares. This move is anticipated to solidify YTL's position in the IBS sector and enhance its market presence across multiple regions.