KUALA LUMPUR (Jan 25): Shares of S P Setia Bhd rose on Wednesday after the board received a revised offer, raising the price by five sen to RM3.95 per share.
At 3.06pm, S P Setia was up six sen to Rm3.94. There were 1.91 million shares done at prices ranging from RM3.93 to RM3.97.
Last Friday, Permodalan Nasional (PNB) and S P Setia’s group president and CEO Tan Sri Liew Kee Sin jointly agreed to raise the general offer (GO) price for SP Setia from RM3.90 a share and 91 sen a warrant to RM3.95 a share and 96 sen a warrant respectively.
UOB Kay Hian Malaysia Research said the upward revision of five sen “is minimal, but it implies a mild positive ending to the saga and that the relationship between PNB and S P Setia would still be positive”.
Liew and S P Setia would ink a management agreement where he would remain as group president and CEO of the company for three years following the close of the revised offer, in line with the market’s expectations.
"We understand Tan Sri Liew would not be selling his 8% stake but is eligible for a put option at RM3.95 spread over three years,” it said.
UOB Kay Hian Research said while “we do not doubt the strong capabilities of S P Setia’s management, but we are concerned that the property market would be rough going forward”.
The research house said S P Setia’s key products were skewed towards the mid-range to high-end segment.
The research house said it was maintaining a Sell and target price of RM2.99 (pegged at a 30% discount to RNAV), premising on the past-peak property and investment cycle and also due to lingering external concerns.
“Since September 2011, S P Setia’s rich valuations at 22 times forward PE and 2.2 times P/B are supported by the takeover by PNB at RM3.90. Hence, we expect share price to retrace to a 30% discount to RNAV (mid-cycle valuation) once the takeover is finalised. Our target price implies 16.7 times FY13F PE, on a par with its historical mean of 16 times,” it said.
At 3.06pm, S P Setia was up six sen to Rm3.94. There were 1.91 million shares done at prices ranging from RM3.93 to RM3.97.
Last Friday, Permodalan Nasional (PNB) and S P Setia’s group president and CEO Tan Sri Liew Kee Sin jointly agreed to raise the general offer (GO) price for SP Setia from RM3.90 a share and 91 sen a warrant to RM3.95 a share and 96 sen a warrant respectively.
UOB Kay Hian Malaysia Research said the upward revision of five sen “is minimal, but it implies a mild positive ending to the saga and that the relationship between PNB and S P Setia would still be positive”.
Liew and S P Setia would ink a management agreement where he would remain as group president and CEO of the company for three years following the close of the revised offer, in line with the market’s expectations.
"We understand Tan Sri Liew would not be selling his 8% stake but is eligible for a put option at RM3.95 spread over three years,” it said.
UOB Kay Hian Research said while “we do not doubt the strong capabilities of S P Setia’s management, but we are concerned that the property market would be rough going forward”.
The research house said S P Setia’s key products were skewed towards the mid-range to high-end segment.
The research house said it was maintaining a Sell and target price of RM2.99 (pegged at a 30% discount to RNAV), premising on the past-peak property and investment cycle and also due to lingering external concerns.
“Since September 2011, S P Setia’s rich valuations at 22 times forward PE and 2.2 times P/B are supported by the takeover by PNB at RM3.90. Hence, we expect share price to retrace to a 30% discount to RNAV (mid-cycle valuation) once the takeover is finalised. Our target price implies 16.7 times FY13F PE, on a par with its historical mean of 16 times,” it said.
