BBR Holdings

[TTTI]

Yea, all share deal. At $0.31, which is a huge premium to existing share price.
I wouldn't compare it to book value, most construction companies are at a big discount to book value.
To the seller, the book value doesn't mean anything. The current share price when they were negotiating the acquisition, is what concerns the seller.
Also, at $0.31, there's no need to worry about a "lock in" period for the seller. I don't think he'd negotiate based on $0.31, and sell out quickly at $0.21.
Also, no dilution to existing shareholders technically, although the number of shares outstanding will increase.
Overall, a good deal for BBR.
We have to watch the currency risks though, MYR has chronically been weakening against SGD.

On the contrary, there is dilution to the existing shareholders. But it will be minimal as the new shares are
only 5.36% of the current number of shares outstanding.

yes there is dilution, but very little.
Not just because the new shares are a fraction of outstanding shares, but because the shares issued is at $0.31, so it's a premium to the existing share price.
As an academic exercise, let me do the math now:
Currently, BBR has 307,999,418 shares issued. NAV is $0.4248 per share, which means the book value of the whole company is $130,838,153

Post acquisition, total shares issued = 324,499,418.
NAV of the acquired stake is $3,856,000.
So total book value would be $134,694,153
Which is $0.415 per share

So the dilution is from $0.425 to $0.415

BUT, not sure if anyone else noticed this, under 3.1.2

"Under the SPA, the Company and the Vendor agree that BBRM may, prior to Completion, declare, make and pay a final dividend of an amount not exceeding RM28,000,000 to its shareholders in respect of FY2016. "

So this means that the seller can theorectically take out 20% of RM28mil as dividends...
The seller is not selling a controlling stake though, so BBR still decides what dividends to pay out before the acquisition is completed