General Announcement
Reference No CU-050215-46390

Submitting Merchant Bank	:	ASEAMBANKERS MALAYSIA BERHAD
Company Name	:	ISLAND & PENINSULAR BERHAD
Stock Name	:	I&P
Date Announced	:	16/02/2005


Type	:	Announcement
Subject	:	Island & Peninsular Berhad Mandatory general offer by Island & Peninsular Berhad ("I&P") to acquire 35,000,000 ordinary shares of RM1.00 each representing 29.91% of the issued and paid-up share capital in Syarikat Perumahan Pegawai Kerajaan Sdn. Bhd. ("SPPK") from the Ministry of Finance, Inc. ("MOF") undertaken pursuant to Part II of the Malaysian Code on Take-overs and Mergers (Amendment) 2004 ("the Code") ("Mandatory Offer")

Contents :

1. INTRODUCTION AND BACKGROUND INFORMATION

We refer to the above matter and the announcement by the Company on 8 February 2005. In the aforementioned announcement,

Aseambankers Malaysia Berhad ("Aseambankers") on behalf of the Board of Directors of I&P had on 8 February 2005 served a written notice to the Board of Directors of SPPK to acquire 35,000,000 ordinary shares of RM1.00 each representing 29.91% of the issued and paid-up share capital of SPPK ("the Remaining Stake") from the MOF for a total consideration of RM155,927,368 ("Notice"). A copy of the Notice is enclosed in the announcement dated 8 February 2005.

Pursuant to the Code, the Mandatory Offer requirement arises or is triggered when I&P obtains control in SPPK by virtue of the

the acquisition of the 82,000,000 ordinary shares of RM1.00 each representing approximately 70.09% of the issued and paid-up share capital of SPPK from Amanah Raya Berhad ("Acquisition of SPPK"). The Acquisition of SPPK has been recently completed.

2. DETAILS OF THE MANDATORY OFFER

As stated above, the obligation to undertake the Mandatory Offer is triggered upon completion of the Acquisition of SPPK.

2.1 Basis of purchase consideration

Based on the consideration to acquire the initial 70.09% stake from Amanah Raya Berhad ("ARB"), the Remaining Stake is valued at RM155,927,368 or RM4.46 per ordinary shares of RM1.00 each in SPPK. The purchase consideration for the Mandatory Offer is RM155,927,368 or approximately RM4.46 per SPPK share of RM1.00 each and shall be satisfied by either of the following:

(a)

45,860,991 new ordinary shares of RM1.00 each in I&P ("I&P Shares") at an issue price of RM3.40 per I&P Share ("Consideration Shares"); or

(b) RM155,927,368 in cash.

MOF may decide to undertake to exercise full acceptance of this Mandatory Offer or it may opt to accept only a portion of this Mandatory Offer. MOF may also opt to accept the share offer under (a) or cash offer under (b).

The issue price of RM3.40 per Consideration Share was arrived at after taking into consideration the five (5)-day weighted average market price of I&P Shares up to 11 September 2003, being the latest practicable date prior to the execution of the SPPK Shares Sale And Purchase Agreement dated 16 September 2003 entered into between I&P and ARB pursuant to the Acquisition of SPPK.

The Consideration Shares shall, upon allotment and issue, rank pari-passu in all respects with the existing ordinary shares of RM1.00 each in I&P except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date (namely the date as at the close of business on which the shareholders must be registered in order to be entitled to any dividends, rights, allotments and/or distributions) of which is prior to the date of allotment of the Consideration Shares. The Consideration Shares will also not be entitled to the proposed capital repayment that is undertaken by I&P under the Rationalisation Exercise. Fractions of a Consideration Share will not be allotted; the number of Consideration Shares allotted will be rounded down to the nearest whole Consideration Share.

In relation to (a) and (b) above, whereby the purchase consideration of the Mandatory Offer will be satisfied either by the issuance of 45,860,991 new ordinary shares of RM1.00 each in I&P to MOF or entirely by cash, I&P has ensured, and Aseambankers is reasonably satisfied that the Mandatory Offer would not fail due to insufficient financial capability of the Offeror, and if MOF wishes to accept the Mandatory Offer, it will be allotted and paid with the Consideration Shares and cash respectively in full.

2.2 Liabilities to be assumed

There are no liabilities to be assumed by I&P pursuant to the Mandatory Offer.

2.3

espatch of offer document

The Mandatory Offer is subject to the approvals of the relevant authorities being received prior to the despatch of the offer document. Section 13(7) of the Code requires I&P to despatch the offer document not later than thirty five (35) days from the date of the serving of the Notice. Aseambankers, on behalf of I&P,

had on 14 February 2005,

sought an exemption from complying with the requirements of Section 13(7) of the Code until such time the relevant approvals from the authorities and the shareholders of I&P for the Mandatory Offer have been obtained.

The offer document will be despatched to the MOF being the holder of the Remaining Stake, which is subject to the Mandatory Offer

3. CONDITIONS OF THE MANDATORY OFFER

The Mandatory Offer is conditional upon the following:

(i)

The Mandatory Offer will remain open for acceptances for at least

twenty one (21) days

from the date the offer document is first posted or such later date as the Offeror may decide in accordance with the Code or the date when the Offer lapses or is withdrawn if this date is the later ("Closing Date"), unless extended or revised by the Offeror in accordance with the Code. The date between the date of the Offer Letter and the Closing Date will hereinafter be referred to as the "Offer Period".

(ii) Should MOF decide to accept the Mandatory Offer, I&P would be required to obtain the following approvals prior to the settlement of the consideration:

a) Securities Commission ("SC") in respect of acceptances for both on the issuance of shares* and the Offer Document itself;

Foreign Investment Committee ("FIC") (via the SC);

Bursa Securities for the listing of and quotation for the Consideration Shares arising from the Mandatory Offer*; and

Shareholders of I&P at a general meeting to be convened*.

* only in the event that MOF opt for the Consideration Shares.

4. BACKGROUND INFORMATION OF SPPK

SPPK was incorporated on 29 March 1971 in Malaysia under the Companies Act 1965 ("Act") as a private limited company under the name Syarikat Kemajuan Pegawai-Pegawai Kerajaan Sdn. Bhd. The Company assumed its present name on 26 June 1975. As at 30 July 2004, the authorized capital of SPPK is RM150,000,000 comprising 150,000,000 ordinary shares of RM1.00 each of which 117,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up.

SPPK was incorporated as a property developer and this has been the core business activity for the past 33 years. SPPK was incorporated in 1971 by the Federal Government to build affordable homes for government servants and has developed and sold 16,652 residential units from incorporation till end 2003. Notable developments include Damansara Heights, Kampong Tunku in Kelana Jaya, Taman Melati, Setapak and the on-going township of Alam Damai in Cheras. Over the years the Company has developed residential units throughout the country and the larger developments are Taman Suria in Johor, Taman Pekaka in Penang and Taman Paroi Jaya in Negeri Sembilan.

SPPK also built and holds as investment several commercial buildings in Damansara Heights which are tenanted.

The list of substantial shareholders of SPPK as at 15 February 2005 is as follows:

Name	No. of Shares	%
Menteri Kewangan Diperbadankan	35,000,000	29.91
I&P	82,000,000	70.09

The directors of SPPK as at 31 December 2004 is as follows:

Name

Tan Sri Dato' Seri (Dr) Ahmad Sarji bin Abdul Hamid

Tan Sri Dato' Dr Lin See Yan

Tan Sri Dato' Ir. Talha bin Haji Mohd Hashim

Tan Sri Dato' Ir. Wan Abdul Rahman bin Haji Wan Yaacob

Datuk Dr. Nik Mohd Zain bin Haji Nik Yusof

Tuan Haji Mohamed Noor bin Haji Mat Ali

Dato' Zolkapli @ Zulkifli bin Sharif

Ir. Jamaludin bin Osman

None of the above directors have any direct or indirect shareholdings in SPPK.

The audited consolidated results for the past five (5) financial years ended 31 December 2003 of SPPK are as follows:

	1999 RM'000	2000 RM'000	2001 RM'000	2002 RM'000	2003 RM'000
Turnover	69,634	84,879	76,397	85,974	175,497
PBT	13,318	42,293	26,741	27,165	61,353
Taxation/(Tax exempt income)	(1)	-	-	2	-
PAT/(LAT) after MI	13,317	42,293	26,741	27,163	61,353
Number of shares in issue ('000 shares)	117,000	117,000	117,000	117,000	117,000

Net EPS per share (sen)	11	36	23	23	52
NTA	300,555	338,723	359,614	386,777	443,451
NTA per share	2.57	2.90	3.07	3.31	3.79

Notes:-

* Earnings/(losses) before interest expense, taxation, depreciation and amortisation.

5. EFFECTS OF THE MANDATORY OFFER

The effects of the Mandatory Offer on the share capital, earnings and major shareholders' shareholdings of I&P shall be as follows:

5.1 Issued and Paid-Up Share Capital

For illustration purpose, the effects of the Mandatory Offer on the issued and paid-up share capital of I&P based on its existing share capital as at 14 January 2005 would be as follows:

	No. Of Shares ('000)
Existing Issued and Paid-Up Share Capital as at 14 January 2005	832,736*
To be issued pursuant to the voluntary general offer on Negara Properties (M) Bhd ("VGO on Negara")	91,156**
To be issued pursuant to the Mandatory Offer	45,861^
TOTAL ENLARGED ISSUED AND PAID UP CAPITAL	933,004

* Comprising 353,558,795 ordinary shares of RM1.00 each and 479,176,801

Ordinary A-Shares of RM1.00 each.

** Assuming that I&P is able to obtain 100% acceptance for VGO on Negara

^ In the event that MOF opts for the Consideration Shares

Based on the assumption that

100% of the MOF's acceptance in cash offer, the Mandatory Offer will not have any effect on the issued and paid up share capital of I&P.

5.2 Earnings

The Mandatory Offer is expected to contribute positively to the future earnings of the I&P Group.

5.3 Net Tangible Asset

The Mandatory Offer is expected to contribute positively to the future Net Tangible Asset of the I&P Group.

5.4 Substantial Shareholders' Shareholdings

For illustration purpose, the effects of the Mandatory Offer on the shareholdings of the substantial shareholders of I&P based on their respective shareholdings as at 14 January 2005 based on the assumption that 100% of MOF's acceptance is on the share offer is set out below:

	As at 14 January 2005		After the Mandatory Offer
Name	No. of Shares	%*	No. of Shares	%*
PNB¹	1,000	-	1,000	-
EPF	15,568,100	4.40	15,568,100	3.90
ARN²	184,402,920	52.16	184,402,920	46.17
Malaysia National Insurance Berhad	5,914,800	1.67	5,914,800	1.48
Takaful Nasional Sdn Bhd	2,060,000	0.59	2,060,000	0.52
Yayasan Pelaburan Bumiputra³	-	-	-	-
MOF	-	-	45,860,991	11.48

Notes:

Based on the 353,558,795 issued and paid-up capital of I&P and excluding the 479,176,801 Ordinary A Shares and excluding up to 91.156 million

new additional

I&P Shares to be issued by I&P for the VGO on Negara

1. By virtue of the Prescription By the Minister Under Paragraph 6A(3)(d) of the Act as gazetted in Notification P.U (B) 61 dated 7 February 2002, PNB is deemed not to have indirect interest in the direct shareholding of unit trust schemes managed by Amanah Saham Nasional Berhad or its related corporations in I&P

ARN for unit trust schemes managed by Amanah Saham Nasional Berhad, where

on a collective basis shareholdings exceed 5%

Deemed interested via its substantial shareholding in PNB of 100% less one (1)

share of PNB by virtue of Section 6A of the Act

The Mandatory Offer will not have any effect on the shareholdings of the substantial shareholders of I&P if the Mandatory Offer is to be satisfied by cash.

6. DISCLOSURE OF INTERESTS OF THE DIRECTORS AND/OR MAJOR SHAREHOLDERS OF I&P IN SPPK

To the best knowledge of I&P, the directors and major shareholders of I&P have no direct and indirect interest in SPPK.

7. DEPARTURE FROM THE SC GUIDELINES

To the best knowledge of I&P, the Manadatory Offer has not departed from the SC's Policies and Guidelines on Issue/ Offer of Securities.