Mulpha, dented but expanding

There are not many companies that can take a hit of over RM500mil and still be acquisitive for more assets.
This was the situation in Mulpha International Bhd which disclosed last week that its investment in Sydney-listed FKP Property Group incurred a loss on paper of RM530mil.
In a statement on FKP’s rights issue that was recently completed, Mulpha said its subscription and open-market purchases since April raised its stake in FKP to 22.8% from 12.9%.
It is obviously very keen on FKP, a developer and owner of retirement villages in Australia, as it subscribed to the rights issue at A$1.50 a share even when the shares were trading well below that. FKP closed at 67 Australian cents on Friday.
The additional interest further cements Mulpha’s position as FKP’s biggest shareholder, especially when there’s interest in FKP from other suitors.
FKP received a takeover offer at A$5 a share in cash and shares from Lend Lease Corp Ltd in June, but the FKP board rebuffed the offer which it felt undervalued the company.
Lend Lease’s offer was pitched just above FKP’s net tangible assets of A$4.96 a share, but FKP’s share price collapsed in October when global stock markets swooned.
Another suitor, Australian developer Stockland Group, which also subscribed to FKP’s rights issue, raised its stake in the company to 14.96%, according to reports last week.
Mulpha disclosed the book value of its stake in FKP at RM663.6mil as against its cost of RM598.4mil. The market value of that, however, was just RM132.9mil at the end of last month.
That may have been priced into Mulpha’s share price which was 37 sen on Friday versus RM1.56 on Jan 2.