KUALA LUMPUR (Jan 9): DRB-HICOM BHD [] has confirmed it has submitted a bid to acquire Khazanah Nasional Bhd’s 42.7% stake in PROTON HOLDINGS BHD [].
“As at to date, the proposal is pending decision by Khazanah,” it said in a statement to Bursa Malaysia following a telephone query from the exchange.
DRB-Hicom said it had always viewed Proton as an important automotive industry player.
“DRB-Hicom was on the look-out for when opportunity will arise to explore any viable proposal(s) which will benefit and add value to the group’s business and expansion plans,” it said.
OSK Research said it was maintaining its trading buy for Proton at an unchanged fair value of RM5.87, premised on a 10% premium to its adjusted NTA per share of RM5.34, which includes a revaluation surplus of RM147.6 million on the group's land bank and after stripping off all intangibles and inventories, as well as the estimated equity value of loss-making Lotus.
“The stock’s 1HFY12 NTA is RM7.62,” it said in a research note on Monday.
OSK Research said the attempts from Proton chairman Datuk Nadzmi Mohd Salleh and other joint bidders do not represent enough value to ensure Proton’s turnaround.
“We still reiterate that DRB-Hicom is currently Proton’s best suitor given its tie-up with Volkswagen, which intends to set up a large ASEAN production hub in Malaysia. This is followed by Naza, which plans to localise production of the Chevrolet marquee by making use of Proton’s Tanjung Malim plant,” it said.
OSK Research said funding would not be an issue for DRB-Hicom as the group’s net gearing ex-bank related assets and liabilities stand at only 17%, as indicated by its last quarterly results.
“This can be easily stretched to 50%-70% to acquire Proton and possibly even higher, given Proton’s onerous capex needs and its planned R&D activities and expansion,” it said.
The research house said interestingly DRB-Hicom recently announced that it is raising RM500 million from the Sukuk market for working capital purposes, as well as other potential acquisitions and expansion.
DRB-Hicom has an option to maximise this sukuk issue to the tune of RM1.8 billion.
“As at to date, the proposal is pending decision by Khazanah,” it said in a statement to Bursa Malaysia following a telephone query from the exchange.
DRB-Hicom said it had always viewed Proton as an important automotive industry player.
“DRB-Hicom was on the look-out for when opportunity will arise to explore any viable proposal(s) which will benefit and add value to the group’s business and expansion plans,” it said.
OSK Research said it was maintaining its trading buy for Proton at an unchanged fair value of RM5.87, premised on a 10% premium to its adjusted NTA per share of RM5.34, which includes a revaluation surplus of RM147.6 million on the group's land bank and after stripping off all intangibles and inventories, as well as the estimated equity value of loss-making Lotus.
“The stock’s 1HFY12 NTA is RM7.62,” it said in a research note on Monday.
OSK Research said the attempts from Proton chairman Datuk Nadzmi Mohd Salleh and other joint bidders do not represent enough value to ensure Proton’s turnaround.
“We still reiterate that DRB-Hicom is currently Proton’s best suitor given its tie-up with Volkswagen, which intends to set up a large ASEAN production hub in Malaysia. This is followed by Naza, which plans to localise production of the Chevrolet marquee by making use of Proton’s Tanjung Malim plant,” it said.
OSK Research said funding would not be an issue for DRB-Hicom as the group’s net gearing ex-bank related assets and liabilities stand at only 17%, as indicated by its last quarterly results.
“This can be easily stretched to 50%-70% to acquire Proton and possibly even higher, given Proton’s onerous capex needs and its planned R&D activities and expansion,” it said.
The research house said interestingly DRB-Hicom recently announced that it is raising RM500 million from the Sukuk market for working capital purposes, as well as other potential acquisitions and expansion.
DRB-Hicom has an option to maximise this sukuk issue to the tune of RM1.8 billion.
