The proposed acquisition confirms a report by TheEdge.com.my which was published in SunBiz earlier.

In a statement to the KLSE yesterday, MMC said the 50.1% stake in PTP is valued at RM 1.646 billion and MMC is also required to buy 50.1% of Seaport's obligations to all the existing and future issues of redeemable convertible subordinated loans (RCSLs).

The RCSLs totalled RM507 million and 50.1% of this is RM254 million.

MMC will settle the bill for the acquisition with RM884 million cash while the remaining RM1.016 billion will be settled through the issue of 338.66 million new MMC shares at RM3 per share.

This is favourable for MMC as the issue price is a substantial premium over its market price of RM2.20 yesterday.

MMC said its issue price of RM3 a share was arrived at after taking into consideration the five-day weighted average market price of MMC of RM2.21 from Nov 3 to 9, the day prior to the announcement of the PTP acquisition.

PTP is MMC' second major acquisition this year, following its recent purchase of a 22.7% stake in power producer Malakoff Bhd for RM744.09 million.

MMC is expected to be able to pay for its acquisition as it had RM572.6 million cash as at July 31, 2000. In addition, MMC will be receiving A$354.04 million (RM708.09 million) by the middle of this month from the sale of its entire 49.72% equity interest in Ashton Mining Ltd to Rio Tinto Ltd.

Prior to Seaport's share sale agreement with MMC, Seaport had in June entered into an agreement with Dannish logistics group Maersk A/S for the sale of a 30% equity interest in PTP to the latter.

Analysts believe Maersk paid between RM600 million and RM900 million for that stake in PTP, valuing the whole of PTP at between RM2 billion and RM3 billion.

"MMC's purchase price might be a bit higher that what Maersk paid for. It may be because Maersk will contribute its logistics expertise and new business to the port. Also, MMC is acquiring a controlling stake and that will be more expensive," said an analyst.

MMC said its board appointed KPMG Corporate Finance to conduct an independent valuation of the fair market value of 100% of the equity stake, including the RCSLs as at Dec 31, 1999, and KPMG's valuation, using the discounted cash flow method, estimated the value to be between RM3.0 billion and RM3.3 billion.

Based on the estimate, MMC's purchase price represent a premium of between 15.15% and 26.67% to KPMG's valuation.

Seaport's original cost of investment was RM50 million on Dec 29, 1994.

On the effect of the PTP acquisition on MMC's shareholders, MMC said although Permidalan Nasional Bhd's interest in MMC will be reduced to 31.3% from 44%, it will remain the single largest shareholder