KUALA LUMPUR: Proton Holdings Bhd shares rallied to a five-month high after rumours of a possible takeover by billionaire Tan Sri Syed Mokhtar’s DRB-Hicom Bhd and the Naza Group resurfaced.
Proton’s share price reached an intraday high of RM3.63, bucking the downward trend on Bursa Malaysia. At the closing bell, it closed at RM3.53, up 10% or 32 sen, the highest since June 17. Its share price began to move on Tuesday when it jumped 18% to RM3.21 from RM2.70.
The rumour mill is currently rife with speculation that there has been renewed interest by DRB-Hicom as well as the Naza Group to acquire Proton. Both DRB-Hicom and the Naza Group are involved in the manufacturing and distribution of cars.
The former is mainly involved in the manufacture, assembly, distribution and sale of motor vehicles, motorcycles and special-purpose vehicles with brands like Honda, Isuzu, Suzuki and Mitsubishi under its belt.
The latter assembles brands such as its own Naza, Kia and Peugeot, and is the main importer and distributor of luxury automotive brands such as Ferrari and Brabus.
It is known that Khazanah Nasional Bhd, the government’s investment holding arm, has long been trying to exit or find a strategic partner for Proton, in which it holds a 42.74% stake. At present, Khazanah has no board representation in the national carmaker.
In 2006 and 2007, Khazanah was in negotiations with Volkswagen AG, the European auto giant, to acquire a stake in Proton, but the talks broke down in late 2007.
DRB-Hicom had previously approached Proton in 2009 and formally submitted a bid to buy 32% of Proton shares. After the talks with Proton broke down, Volkswagen partnered instead with DRB-Hicom in late 2010 to assemble and manufacture Volkswagen vehicles in Malaysia.
Since then, no material announcements have been made on the progress of DRB-Hicom’s takeover bid.
Naza was also earlier rumoured to be interested in Proton, but appeared to have since shifted focus to its Volkswagen tie-up and property ventures. With no further corporate developments in Proton, the rumour mill also died down — until recently.
“At this juncture, they (DRB-Hicom) aren’t looking to acquire any companies,” said an analyst at a bank-backed research house which recently met with the group’s management.
“The market is also hearing speculation that DRB-Hicom may want to take over Group Lotus, which is 100% owned by Proton,” the analyst added.
DRB-Hicom officials contacted by The Edge Financial Daily declined to comment on the matter.
Proton made a net profit of RM155.6 million on revenue of RM8.97 billion for FY11 (ended March), lower than the previous year, where it reported a net profit of RM218.9 million on revenue of RM8.23 billion.
Its net assets per share stood at RM9.86 as at June 30, placing the stock’s price-to-book ratio at 0.36 times.
This article appeared in The Edge Financial Daily, November 17, 2011.
Proton’s share price reached an intraday high of RM3.63, bucking the downward trend on Bursa Malaysia. At the closing bell, it closed at RM3.53, up 10% or 32 sen, the highest since June 17. Its share price began to move on Tuesday when it jumped 18% to RM3.21 from RM2.70.
The rumour mill is currently rife with speculation that there has been renewed interest by DRB-Hicom as well as the Naza Group to acquire Proton. Both DRB-Hicom and the Naza Group are involved in the manufacturing and distribution of cars.
The former is mainly involved in the manufacture, assembly, distribution and sale of motor vehicles, motorcycles and special-purpose vehicles with brands like Honda, Isuzu, Suzuki and Mitsubishi under its belt.
The latter assembles brands such as its own Naza, Kia and Peugeot, and is the main importer and distributor of luxury automotive brands such as Ferrari and Brabus.
It is known that Khazanah Nasional Bhd, the government’s investment holding arm, has long been trying to exit or find a strategic partner for Proton, in which it holds a 42.74% stake. At present, Khazanah has no board representation in the national carmaker.
Group Lotus, which is 100% owned by Proton, is also rumoured to be a takeover target by DRB-Hicom.
In 2006 and 2007, Khazanah was in negotiations with Volkswagen AG, the European auto giant, to acquire a stake in Proton, but the talks broke down in late 2007.
DRB-Hicom had previously approached Proton in 2009 and formally submitted a bid to buy 32% of Proton shares. After the talks with Proton broke down, Volkswagen partnered instead with DRB-Hicom in late 2010 to assemble and manufacture Volkswagen vehicles in Malaysia.
Since then, no material announcements have been made on the progress of DRB-Hicom’s takeover bid.
Naza was also earlier rumoured to be interested in Proton, but appeared to have since shifted focus to its Volkswagen tie-up and property ventures. With no further corporate developments in Proton, the rumour mill also died down — until recently.
“At this juncture, they (DRB-Hicom) aren’t looking to acquire any companies,” said an analyst at a bank-backed research house which recently met with the group’s management.
“The market is also hearing speculation that DRB-Hicom may want to take over Group Lotus, which is 100% owned by Proton,” the analyst added.
DRB-Hicom officials contacted by The Edge Financial Daily declined to comment on the matter.
Proton made a net profit of RM155.6 million on revenue of RM8.97 billion for FY11 (ended March), lower than the previous year, where it reported a net profit of RM218.9 million on revenue of RM8.23 billion.
Its net assets per share stood at RM9.86 as at June 30, placing the stock’s price-to-book ratio at 0.36 times.
This article appeared in The Edge Financial Daily, November 17, 2011.
