KUALA LUMPUR (Jan 13): Public Investment Bank is positive on IGB Bhd’s (KL:IGBB) disposal of St Giles London for £220 million (RM1.2 billion), as the proceeds can be used for future expansion, particularly new retail and commercial developments in Southkey, Johor.

The research house said in a note IGB had also stepped up landbanking activities with recent land acquisitions near Mid Valley Southkey, in Petaling Jaya, and in Ipoh.

Various news reports have named billionaire Asif Aziz’s Criterion Capital as the buyer of St Giles London.

PublicInvest said that the 732-room, three-star hotel’s sale price is about 4% below valuation but will generate a net gain of around RM452.6 million or 34 sen a share for IGB. 

The research firm expects the exercise to lift the group’s earnings and net assets in the financial year ending Dec 31, 2026 but kept its earnings estimates and ‘neutral’ call for now.

The sole firm covering the stock nudged its 12-month target price upwards to RM3.30 from RM2.95 based on book value. The target price however remains about 8% below IGB's current trading price of RM3.61 a share, valuing the company at RM4.79 billion. The stock hit a 52-week high of RM3.71 a share on Monday.

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IGB disposes of St Giles Hotel London and shares in Ravencroft Investment for £220 million