Ajinomoto’s RM603mil Privatisation — and the Land Trade That Sits Underneath It

Ajinomoto Co Inc is taking its Malaysian arm private. Ajinomoto (Malaysia) Berhad will cancel and repay the 49.62% of its shares held by minority shareholders at RM20 each — a 31.58% premium to its RM15.20 close on 19 June, the last full trading day before the proposal letter — in a selective capital reduction costing RM603.4mil.

That is the corporate headline. The more interesting story, for anyone who deals in industrial land, is what the company did with its property in the weeks either side of it.

How the deal is structured

This is not a conventional takeover. Ajinomoto Co already holds 50.38% of the Malaysian company — 30.63 million of the 60.8 million shares in issue — and rather than buying the rest on the market, the exercise runs as a selective capital reduction and repayment: the company itself cancels the 30.17 million minority shares and repays their holders RM20 each. Because the repayment exceeds the company’s issued share capital of RM65.1mil, it first undertakes a bonus issue of 571.11 million shares, capitalising RM571.11mil out of retained earnings. The parent waives its entitlement to those bonus shares, which are then cancelled alongside the minority holdings.

The repayment is funded from the company’s own internal funds plus advances from the parent estimated at RM445mil, which Maybank Investment Bank says leaves the company with sufficient resources. Maybank IB is principal adviser; RHB Investment Bank acts as independent adviser to minority shareholders and to the board excluding the interested directors, Daisaku Wadami, Taishi Akiyama and Akihiko Nozaki.

The stated reasoning is unglamorous and fairly convincing: the stock barely trades — average daily volume has run at about 0.13% of free float — and the company has not raised money from the market in over a decade. The listing costs more than it delivers. Approval needs a simple majority in number of disinterested shareholders and at least 75% in value of votes cast at an EGM, with votes against capped at 10% of disinterested shares; the parent and interested directors abstain. On 21 July the board — having taken RHB IB’s advice — resolved to table the exercise to disinterested shareholders at that EGM.

The market read it as generous. The shares jumped 25% to RM19 on 23 June, the first trading day after the announcement, and were at RM18.80 by that Monday — a market capitalisation of about RM1.14bil.

The land trade underneath

On 20 July 2026 — a day before that board backing — the company told Bursa Malaysia it was selling six contiguous leasehold parcels totalling 10.51ha at Jalan Kuchai Lama, Kuala Lumpur, for RM408mil cash. The buyer is Paragon TSL Sdn Bhd, whose director and major shareholder is Tan Sri David Law Tien Seng. A special dividend of RM2.12 per share — about RM128.9mil — was declared alongside it.

The company’s explanation was straightforward: the plots, which housed its corporate offices and factories, could no longer support capacity expansion.

Now put that beside what it bought. In February 2018 Ajinomoto acquired 2.03 million sq ft of freehold land at Techpark@Enstek in Bandar Enstek, Negeri Sembilan, from Lembaga Tabung Haji for RM86.08mil — a price set against an independent valuation of RM41 per sq ft. It then spent RM355mil building a new plant there, which opened in 2022 after around sixty years at Kuchai Lama.

Run the numbers

The arithmetic is the point:

• Sold: 10.51ha (about 26 acres) leasehold in Kuala Lumpur for RM408mil — roughly RM361 per sq ft
• Bought: 2.03 million sq ft (18.86ha, about 47 acres) freehold in Negeri Sembilan for RM86.08mil — roughly RM42 per sq ft

Ajinomoto sold city land at about 8.5 times the per-square-foot price of the land it replaced it with. It came away with nearly double the site area, freehold instead of leasehold, a purpose-built plant designed for expansion, and several hundred million ringgit of cash — part of which has gone straight back to shareholders, and part of which now helps fund the buyout of those same shareholders.

What it means for industrial land

• This is the textbook version of the urban-industrial exit. Old factory on expensive city land, no room to grow, surrounded by higher-value uses. Sell high, rebuild bigger and cheaper an hour away, bank the difference. Anyone holding ageing industrial land inside a major city has the same option — the question is only whether the replacement site and the timing work.

• RM361 psf is a real KL benchmark, and it is leasehold. For a 26-acre industrial-use site in the Kuchai Lama corridor, that is a current, arm’s-length figure from a listed seller. Anchor your valuations to tenure: leasehold at RM361 psf is not the same trade as freehold at RM361 psf.

• Halal-hub and KLIA-adjacent land is winning these relocations. Bandar Enstek offered freehold title at roughly a tenth of city pricing, airport proximity and halal certification infrastructure — a combination that is pulling food and pharmaceutical manufacturers out of the Klang Valley. Expect more of these moves, not fewer.

• Watch what a privatisation implies about asset value. A privatisation priced at a 31.6% premium, landing immediately after the company monetised its most valuable land, is worth noting. Listed manufacturers sitting on legacy urban land are often worth more for the land than the operations — and the people closest to the business tend to see that first.