Malaysian backers to net €184m from Kentz

The Malaysian investors who stepped in 20 years ago to rescue engineering group Kentz from examinership are poised to make about €184 million if the bid tabled for the company by Canadian rival, SNC-Lavalin, succeeds. SNC-Lavalin this week offered to buy the Irish-headquartered business for 935 pence sterling a-share, valuing it at close to €1.5 billion. The price is a 33 per cent premium to the closing quote for its stock on Friday in London.

It values the 13.6 per cent stake held by Kentz's biggest shareholder, Kerbet Ltd, at £147.7 million, just short of €184 million. Kerbet is the vehicle for board member and shareholder, Tan Sri Mohd Razali Abdul Rahman, and fellow investor, Hassan Abas.

The Malaysian businessmen rescued MF Kent from examinership in 1994. The collapse of a Spanish client, Hovissa, forced the Tipperary-based company to seek protection from its creditors. It had borrowed substantially against the revenues due under its deal with the Hovissa.

Peremba, the original vehicle used to acquire the Irish company, initially bought 60 per cent of the group, but subsequently increased this to 90 per cent. It transferred its stake to Kerbet in 2006.

In April 2012 the holding company cashed in around half itsholding in the London-listed group when it sold 15 million Kentz shares for around €80 million. Kerbet placed the shares through brokers Investec and UBS at 400 pence sterling, less than half the price now offered for the compan by SNC.

Following that sale, Kerbet stressed that it remained a firm supporter of the engineering business and had sold part of its stake as it was seeking to diversify its portfolio.

It was also the largest beneficiary when the group floated on London’s Alternative Investment Market (AIM) in 2008. Kerbet sold around 30 million shares at 115 pence.

Kerbet is split 50/50 between the two investors, who hold their shares in the holding company through two other vehicles, Covill Investment and Gigondas Real Estate.

The next largest shareholder is finance institution, Standard Life, which has 7.22 million shares. According to its 2013 annual report, executive director, Ed Power, has just over one million shares.