PLUS rises to record af­ter Je­las makes takeover bid for toll-road op­er­a­tor

The Pak Banker - - Company & Boss News -

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

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