KUALA LUMPUR: UMW Holdings Bhd has opened up to the idea of revising upwards its takeover offer of MBM Resources Bhd.
Its chairman Tan Sri Hamad Kama Piah Che Othman said it was sticking to its RM2.56 per share offer for now but sugggested that its stance would change once shareholders of MBM Resources returned with a reply.
“We stick to our position until such a time we believe we should take a different stance.
“Our intention remains. We want to do what we wanted to do. We will wait for them whether they want to proceed or otherwise. So far, they have not yet come back to us,” Hamad Kama Piah said after the company’s annual general meeting here.
UMW plans to buy a 50.07 per cent MBM Resources stake from Med-Bumikar Mara Sdn Bhd in a deal worth RM501 million. This would trigger mandatory takeover offer for all the remaining shares in MBM Resources not already owned by UMW.
In late April, UMW extended the validity of its takeover offer for another six months.
MBM Resources owns 22.58 per cent stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua), the largest carmaker in terms of market share. UWM holds 38 per cent of Perodua.
UMW group president and chief executive officer Badrul Feisal Abdul Rahim said it had not received any indication from Med-Bumikar since extending the offer period.
"I don't have any indication from any sides so far. I guess everyone is busy with post-election fever. Let everything settle down first. I am very sure they will come back to us," he added.
Taking over MBM Resources means that UMW will have the largest control in Perodua.
This will see UMW boosting its future earnings and Permodalan Nasional Bhd (PNB) being the ultimate winner if Perodua could keep up its sales momentum.
PNB is the strategic major shareholder of UMW with a 40.71 per cent stake.
Based on UMW’s current shareholdings in Perodua, AllianceDBS Research raised the firm’s earnings forecasts by nine per cent for financial year ending December 2018, and 10 per cent for financial year ending 2019 and 2020 to account for higher contribution from Perodua.
This has bumped up auto margins expectations higher than earlier forecasted, the research house said in a note yesterday.
“We also believe auto margins should be able to improve as they benefit from the favourable exchange rate at RM3.96 against the US dollar currently versus RM4.30 to the US dollar in the financial year 2017,” it added.