SCB backs management buyout of JAS

 

Pete, who currently controls a 25.84-per-cent stake in JAS, informed the SET yesterday that he intended to acquire additional securities for the purpose of more effective business management but does not intend to delist the firm.

Siam Commercial Bank will prepare the tender offer and provide financial support in a credit facility of up to Bt42.5 billion.

According to JAS, Pete offered to purchase the shares at Bt7.25 each, and Bt3.68 per share for JAS-W3 warrants. 

Arthid Nathawithaya, president and chief executive officer of SCB, said the bank was supporting Pete’s share purchase based on the cash flows of JAS, which total Bt5 billion, and the company’s stable income.

JAS is a leading player in broadband Internet service and telecom infrastructure networks, and SCB considers backing this transaction is reasonable, he said.

The stability of the company’s income results in healthy dividends, so once Pete has more shares, he will earn sufficient dividends to repay SCB, he added.

Normally, the bank will support a management buyout if the business owner is the key man driving the business, and in this case, Pete wants to make JAS’s broadband business more efficient.

Arthid said Pete had acknowledged that holding too low a stake in JAS might not ensure sufficient control of the management of the business if other investors were to purchase a large stake in the company.

Pete has to make this tender offer to comply with the regulation that obliges a major shareholder who holds a 25-per-cent stake in a company and wants to acquire more shares to make such an offer.

Previously, SCB facilitated a working-capital loan of Bt6 billion to JAS for the expansion of its broadband business.

JAS stock yesterday closed at … . It saw the most active share trading yesterday with transaction value at Bt15 billion.

 

The company’s share closed at Bt7.20 yesterday, up 8.27 per cent from Friday’s close.