Zetrix AI Bhd has defended the RM130 million valuation for its proposed acquisition of a 50% stake in MYEG Ventures Inc, saying the price reflects the future growth prospects and strategic value of MYEG Philippines Inc rather than its historical earnings and net assets alone.
The clarification was issued in response to a Bursa Malaysia Securities query over the transaction with IPVG Employees Inc (IPVG), announced on Sept 4.
The acquisition would give Zetrix AI a 50% interest in MYEG Ventures and an effective additional 25.5% interest in MYEG Philippines.
Bursa had sought further explanation of the valuation given that MYEG Philippines recorded average profit after tax of about PHP21.61 million, or RM1.4 million, over the three financial years ended 2023 to 2025, while its net assets stood at approximately RM20 million at end-2025.
Zetrix said the RM130 million consideration was determined principally using a discounted cash flow (DCF) valuation, taking into account projected earnings, growth prospects, existing and potential projects, and opportunities to deploy its blockchain and artificial intelligence platforms in the Philippines.
The valuation was also assessed against forward price-to-earnings multiples over the next five years.
Zetrix said historical earnings and net asset value did not fully capture MYEG Philippines’ future earning capacity, intangible value and strategic potential, particularly as the company expands its digital services in the Philippine market.
Among the projects cited was the Zetrix Layer-1 public blockchain platform, which is intended to support the Philippines’ public blockchain infrastructure following a memorandum of understanding with the country’s Department of Information and Communications Technology announced in July.
Zetrix said MYEG Philippines is also progressing several other projects that are at various stages of finalisation.
Zetrix also explained why it entered into the transaction with IPVG after terminating an earlier agreement with Next Lion Ltd involving the same 50% interest in MYEG Ventures.
It said the previous transaction was terminated following a dispute over the issue price of Zetrix AI shares, amid volatility in the company’s market price.
IPVG was prepared to proceed with the proposed consideration structure despite the share-price volatility, while also seeking a broader strategic partnership with Zetrix.
IPVG has an arrangement to acquire the remaining 40.6% stake in MYEG Ventures from other shareholders, with the prerequisite acquisition expected to be completed by the end of the third quarter of 2026.
Zetrix stressed that no part of the RM130 million consideration will be paid until the relevant conditions precedent are fulfilled, including registration of the 50% MYEG Ventures interest in Zetrix AI’s name.
Upon completion, the transaction is expected to give Zetrix a controlling interest in MYEG Philippines. Subject to meeting MFRS 10 requirements, MYEG Philippines could consequently be consolidated as a subsidiary in Zetrix AI’s group financial statements rather than being accounted for primarily as a joint venture.
The board maintained that the RM130 million consideration is commercially justified and in the best interests of Zetrix AI and its shareholders.
