Cosway Corporation Bhd is selling a 10% stake in its wholly owned subsidiary Cosway (M) Sdn Bhd to US-based Madison County LLC, for the amount of RM100 mln cash or about RM6.45 per share. Madison was established on November 29 this year, and its principal activity is investment holding. Its main shareholder is Penta Strategic Partners SPC, incorporated in the British Virgin Islands.
The 10% purchased stake represents 15.50 mln shares of RM1 each, according to Cosway Corporation, which is a 98.93% subsidiary of Berjaya Corporation Bhd. It was said in an announcement to press that the RM100 million took into consideration the net assets, the past earnings record and the future earnings potential of Cosway (M) group.
According to Berjaya Corporation chairman and chief executive officer Tan Sri Vincent Tan, Madison’s investment was a vote of confidence in the future earnings and growth prospects of the Cosway (M) group.
Cosway (M), which was established in 1980, is involved in the direct sale of household, personal care, healthcare and other consumer products. The company has expanded its network to Australia, Brunei, Hong Kong, India, Macau, Singapore, Taiwan and Thailand. The net asset of the company, based on its audited accounts as at April 30, 2007 was RM124 million. The sale consideration of approximately RM6.45 per Cosway (M) share represents an attractive premium of 706%, that is RM5.65 per Cosway (M) shares over its net assets per share.