KUALA LUMPUR (May 16): Kenanga Investment Bank Bhd (KIBB) is buying the rest of its 73%-owned futures broking subsidiary Kenanga Deutsche Futures Sdn Bhd (KDF) that it doesn't already own from its substantial shareholder Deutsche Asia Pacific Holdings Pte Ltd.

This will allow KIBB to have full control over KDF, enabling efficient decision-making process and allowing KIBB to take a long-term strategy.

In a filing with Bursa Malaysia today, KIBB said it has entered into a share purchase agreement (SPA) with Singapore-based Deutsche Asia Pacific to acquire the remaining 1.35 million shares or a 27% stake in KDF.

Upon completion of the proposed acquisition, KDF will become a wholly-owned subsidiary of KIBB.

Deutsche Asia Pacific owns 8.2% of KIBB shares and is a wholly-owned subsidiary of DB Valoren SARL.

"Purchase consideration is at the net tangible assets (NTA) per share of
KDF as at Dec 31, 2016 based on its audited financial statements (and adjusted after taking into consideration any change in the NTA per share between Dec 31, 2016 and the last day of the calendar month immediately preceding the completion date based on the management accounts of KDF), multiplied by the number of sale shares," said KIBB.

"For illustrative purposes, based on Dec 31, 2016 audited financial
statements of KDF, the consideration price will be RM10 million," it added.

KIBB said it will fund the proposed acquisition by internal funds.

"The proposed acquisition will have an immediate positive effect on the
earnings and earnings per share of KIBB as KDF is expected to generate profit for the financial year ending Dec 31, 2017," said KIBB.

The exercise is expected to be completed within three months after entering into the SPA.

KIBB shares closed two sen or 3.05% higher at 67.5 sen today, with 1.9 million shares done. Its market capitalisation stood at RM487.72 million.