CVC completes partial exit from Malaysian gaming company

Multi-Purpose Holdings Berhad (MPHB), which already owns 51% of Magnum, has acquired CVC's 47% stake as well as 2% held by company management. In taking full ownership of Magnum, MPHB agreed to transfer an 11.1% interest in itself to CVC through the issue of 160 million new shares priced at RM2.30 per share. As of June 16, the stock was trading at around RM3 per share.

MPHB was effectively an investment holding company, with two-thirds of its shares publicly traded and the remainder held by Casi Management. Casi is controlled by Dato' Surin Upatkoon, a Thai national who first came to prominence in the textiles industry. As part of the restructuring, MPHB will divest its non-core assets, which include financial services, property and hospitality, and transform into a pure gaming company. Casi Management's stake is 30.9% and CVC has 11.1%, leaving a 57.9% public float.

"The transaction allows us to monetize our investment in Magnum at an attractive return, while maintaining significant upside from reinvesting some of the proceeds into MPHB shares," Sigit Prasetya, a partner at CVC, tells AVCJ. "As a pure gaming company, MPHB should trade at significantly higher valuation."

MPHB's share price has risen 15%-20% since the transaction was announced.

CVC invested $1.5 billion in Magnum three years ago in what was Malaysia's largest ever foreign private equity transaction. This saw the company delist from the Kuala Lumpur stock exchange. Magnum generated sales of $1.1 billion in 2010, primarily from lottery gaming products such as 4D Jackpot.

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• Topics
• Consumer
• Exits
• Southeast Asia
• CVC Capital Partners