PLUS rises to record after Jelas makes takeover bid for toll-road operator
KUALA LUMPUR: PLUS Expressways Bhd., Malaysia's biggest toll-road operator, rose to a record in Kuala Lumpur stock trading after Jelas Ulung Sdn. offered 26 billion ringgit ($8.3 billion) for the company, topping a rival bid. PLUS jumped 5.5 percent to 4.60 ringgit at the 5 p.m. close, the largest advance in the benchmark stock index. Jelas Ulung, a closely held special purpose vehicle formed for the bid, offered the equivalent of 5.20 ringgit a share for the company's assets and liabilities, PLUS said in a statement yesterday, higher than a joint bid of 4.60 ringgit a share by UEM Group Bhd. and the Employees Provident Fund, or EPF.
"The competing offer is undeniably attractive," Bernard Ching, an analyst at ECM Libra Capital Sdn., wrote in a report today. "This latest development will surely raise the prospect for UEM and EPF to improve their takeover offer."
A takeover of PLUS would give the buyer control of a company that owns and operates 973 kilometers (605 miles) of inter-urban toll expressways in Malaysia, stretching from the border of Thailand in the north to the border of Singapore in the south. PLUS shares have surged 41 percent this year, more than double the benchmark FTSE Bursa Malaysia KLCI Index's 18 percent gain.
The new bid comes before a Dec. 23 vote by PLUS shareholders on UEM Group and EPF's offer. PLUS's board accepted the joint bid on Nov. 9 and planned to discuss it with shareholders at a meeting this month. PLUS is based in Petaling Jaya, near Kuala Lumpur. Izzaddin Idris, the chief executive officer of UEM Group, declined to comment when contacted by phone today. Nik Affendi Jaafar, a spokesman for EPF, Malaysia's biggest pension fund, also declined to comment. Yesterday's PLUS statement named Ibrahim Mohd Zain and Ghazali Mat Ariff as directors of Jelas Ulung. Ibrahim is a director of banking group AMMB Holdings Bhd., according to AMMB's 2010 annual report. Ghazali is a senior partner at law firm Ghazali Ariff & Partners and chairman of Amalgamated Industrial Steel Bhd., according to the steel products manufacturer's website.
BOCI Asia Ltd., a unit of Bank of China Ltd., will support the financing of Jelas Ulung's bid, PLUS said.
Bank of China supported Jelas Ulung's bid because of the "status of potential shareholders," Ibrahim said by email to Bloomberg. He declined to identify them.
The company's board will "deliberate on the offer and decide on the next course of action," taking into consideration the earlier bid, PLUS said in its statement.
Khazanah Nasional Bhd., Malaysia's sovereign wealth fund, is the biggest shareholder of PLUS with a 55 percent stake, which is partly held through UEM Group. The EPF controls 12 percent of PLUS.
"Despite the attractive terms, it's not certain whether the competing offer would pull through," ECM's Ching said in his report. "PLUS's highways are considered strategic national assets and the government would consider the track record and financial status of the bidder apart from the basis of valuation."
Jelas's Ibrahim said in the e-mail there shouldn't be any objection from the Malaysian government as the assets cannot be removed to another country. "Why should the government block it?," he said. "As long as the operator provides the necessary services with good standards, why should anybody object?" In a separate news item, the U.S. Securities and Exchange Commission has begun an inquiry into Mark Hurd's departure as chief executive officer from Hewlett-Packard Co., two people familiar with the matter said.-Bloomberg