In a bourse filing on Tuesday, SEGi said Hii’s private vehicle, EduEdge Equities Sdn Bhd, bought the stake comprising 251.07 million shares at 45 sen per share from Pinnacle Heritage Solutions Sdn Bhd, which is controlled by Navis Capital.
Hii, SEGi’s major shareholder, is the ultimate offeror in the deal as he is the sole director and shareholder of EduEdge Equities.
The acquisition raises the stake held by Hii from 32.46% to 53.01%. Along with a 0.08% stake held by his son-in-law Dennis Ling Sie Hieng, a person acting in concert with Hii, their collective shareholding now stands at 53.09%.
The mandatory takeover offer for the remaining shares is at the same price (45 sen per share). The offerors intend to maintain SEGi’s listing status on Bursa Malaysia.
Navis first emerged as a major shareholder of SEGi in April 2012 after it acquired a 27.84% stake from the then major shareholders Cerahsar Sdn Bhd and Segmen Entiti Sdn Bhd for a total of RM196.31 million.
Teaming up with Hii, it then launched an unconditional takeover offer for all the remaining shares at RM1.71 per share, valuing SEGi at RM1.14 billion. However, the privatisation exercise failed after Affin Investment Bank advised shareholders to reject the offer as it deemed the offer price unreasonable and unfair.
Navis, which has been paring down its investment in the education group over the years, does not appear to have profited much from its long-term investment. SEGi’s financial performance and share price has been on a steady downward trajectory in recent years.
For the year ended Dec 31, 2023 (FY2023), its net profit plunged 71.2% to RM11.58 million, from RM40.19 million a year ago, while revenue dropped 12.8% to RM186.46 million, from RM213.94 million a year earlier. SEGi attributed this mainly to large graduating batches of postgraduate foreign students enrolled with the group’s institutions in the previous financial years.
Navis was founded in 1998 by Richard Foyston, Nicholas Bloy and Rodney Muse, who were colleagues at the Boston Consulting Group. They shared a belief that there was an untapped opportunity to create a distinctive investment firm in Southeast Asia.
To date, the Navis Asia Funds have completed more than 80 controlling private equity investments, predominantly in Southeast Asia. It manages several private and public equity funds totalling more than US$5 billion (RM23.8 billion), according to its website.
The big winner
However, Hii has come out of this smiling like a cheshire cat as the offer price of 45 sen per share represents a 32% discount on SEGi’s closing price of 66 sen on Tuesday.
If the takeover offer succeeds, he would have taken control of one of Malaysia’s leading private tertiary education groups at a substantial discount.
SEGi currently has 16,000 students in five campuses located in Kota Damansara, Kuala Lumpur, Subang Jaya, Penang, and Sarawak, according to its website.
It was established as Systematic College in 1977 in Kuala Lumpur’s commercial district, offering globally recognised professional qualifications. Systematic College was subsequently taken over by Hii who transformed it into SEGi University and Colleges.
Apart from SEGi, Hii also controls listed property group HCK Capital Group Bhd (HCK), which he founded over 12 years ago and serves as its executive chairman.
The company has built its reputation on its “education city series” which leverages on well-known education brands to increase the desirability of its property developments.
Though known for his education empire and in recent years his property ventures, Hii, 66, first made his mark in the media industry in his home state of Sarawak.
He became a reporter straight out of school, and rose up the ranks quickly. He eventually became chief editor at both The Borneo Post and now-defunct Sarawak Herald, in Sibu.
Decades later, he reprised his editorial role when he was appointed executive deputy chairman of Star Publications (M) Bhd, in 2008. However, his stint at the MCA-owned paper was relatively short, leaving the hot seat in December 2010.
His desire to build a new media group in Malaysia saw him set up business weekly Focus Malaysia in 2012, and subsequently several newspapers and news portals, all under the HCK umbrella.
However, Hii’s dream of creating a thriving media empire remained just that in the face of stiff competition and mounting losses. Most of his media ventures were eventually closed or sold off after some years.