KANASAI MALAYSIA MEMANG BOLEH
Jelas Fails to Place Deposit for PLUS Takeover Offer
By Chan Tien Hin and Chong Pooi Koon - Jan 10, 2011 6:38 PM GMT+0800
Jelas Ulung Sdn., which made a 26 billion ringgit ($8.4 billion) takeover offer for PLUS Expressways Bhd. on Dec. 20, said it today failed to meet a deadline to place an initial 50 million-ringgit deposit requested by the Malaysian toll-road operator.
“PLUS placed unexpectedly new conditions,” meaning its original financing arrangements needed substantial adjustment, Jelas director Ibrahim Mohd. Zain said in an e-mailed statement today. The offer remains valid if accepted, he said.
PLUS, the Southeast Asian nation’s biggest operator of inter-urban expressways, set a deadline of 5 p.m. local time today for companies to make takeover offers. Jelas bid the equivalent of 5.20 ringgit a share last month, higher than an earlier joint bid of 4.60 ringgit a share by UEM Group Bhd. and the Employees Provident Fund, the country’s biggest pension fund.
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.
Jelas Ulung was a special purpose set up for this bid. PLUS on Dec. 21 named Ibrahim and Ghazali Mat Ariff as its directors. 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.
China Backing
BOCI Asia Ltd., a unit of Bank of China Ltd., was lined up to support the financing of Jelas Ulung’s bid, PLUS said on Dec. 20. Jelas didn’t have enough time to change its financial arrangements before today’s deadline, it said in today’s statement.
“Since the size of the deal is monumental in nature, such adjustment would require some time to be firmed up,” the company said. Interest rates for short and long-term fluctuate, foreign exchange rates are volatile, fees to advisors need to be adjusted for more work.”
Jelas also said it wanted more details on PLUS’s assets and liabilities and the basis on which the successful bidder would judged.
Share Surge
PLUS shares have surged 50 percent in the past 12 months, more than double the benchmark FTSE Bursa Malaysia KLCI Index’s 21 percent gain. They rose 1.7 percent today to 4.69 ringgit, a record close, after the Star newspaper reported MMC Corp., a construction and ports group controlled by Malaysian billionaire Syed Mokhtar Al-Bukhary, may emerge as a third bidder. There was no news of any MMC bid as of 6:35 p.m. today in Kuala Lumpur.
Khazanah Nasional Bhd., Malaysia’s sovereign wealth fund, is the biggest shareholder of PLUS with a 55 percent stake, partly held through UEM Group. The EPF controls 12 percent of PLUS.
“Even when this offer by Jelas Ulung came out, we wrote a note to clients saying that don’t bank too much on this offer,” Chong Tjen-San, an analyst with HwangDBS Vickers Research, said in a telephone interview today. “The chief of Khazanah has come out several times even prior to this offer, saying that they will not sell national assets to companies where there is a lack of track-record.”
To contact the reporter on this story: Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net; Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net.
To contact the editors responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net; Philip Lagerkranser in Hong Kong at lagerkranser@bloomberg.net.