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FINALLY THE NEWS IS OUT!!!!!!!!!!!!!!!!!!!
Written by Joseph Chin of theedgemalaysia.com
Friday, 22 April 2011 17:53
KUALA LUMPUR: Khazanah Nasional Bhd has divested its strategic 32.21% stake in POS MALAYSIA BHD [] to DRB-HICOM BHD [] at RM3.60 per share or RM622.79 million, deemed a landmark divestment by the government’s investment arm of its entire stake in a major government-linked company.
Khazanah said on Friday, April 22 this decision was made following a rigorous selection process to ensure that the new shareholder will be able to bring Pos Malaysia to the next level of growth.
"The divestment is made via a conditional offer with a price consideration of RM3.60 per share or RM622.79 million. The offer price of RM3.60 per share is subject to the modification of the special rights redeemable preference share in Pos Malaysia held by Minister of Finance (Incorporated),” it said.
On Friday, Pos Malaysia’s share price closed two sen higher at RM3.37 with 595,000 shares done while DRB-Hicom fell two sen to RM2.30 with 2.32 million units transacted.
Khazanah said the conditional offer price was subject to the variation in the use of 16 plots of identified lands owned by the Federal Lands Commissioner and leased to Pos Malaysia.
It said the current terms of the lease allows for only postal services use, while the variation provides for the inclusion of commercial use, over and above the mandatory postal use.
If the variation does not happen by Dec 31, 2011, DRB-Hicom will be refunded 10 sen per share or RM17.30 million.
Khazanah managing director Tan Sri Azman Mokhtar said: “DRB-Hicom was chosen based on their overall bid, which offers not only a defined strategy but also an executable business plan and an acceptable offer price. Their proposed strategy and business plan in turn provides an effective platform for Pos Malaysia’s growth, if adopted by the board of Pos Malaysia as a whole.”
A total of 48 parties were approached to submit their respective proposals, out of which 10 parties expressed their interest to participate and were pre-qualified at the pre-qualification phase.
At the indicative bid phase, all 10 parties were invited to submit their bids. Out of this, five parties reverted with their respective bids.
The five bidders were all given detailed and equal opportunities to meet up with Khazanah’s advisors to explain their respective strategy and business plan submission.
The bidders also had one-on-one meetings with the managements of Khazanah and Pos Malaysia. With respect to the meeting with Pos Malaysia management, which was requested by all the bidders, only publicly available information were shared with the bidders, i.e. information shared at analysts’ briefings and shareholders’ general meetings. Pos Malaysia’s board’s prior approval was obtained for these one-on-one meetings with POS management.
Khazanah said the bidders were given an opportunity to better understand the bidding process and received detailed feedback to help each of them improve their bid submission. Subsequently, all five bidders proceeded to the binding bid phase.
Out of the five bidders, four parties submitted their binding bids. The bidders submitted their bids in separate envelopes containing; (i) the strategy and business plan, and (ii) the offer price.
Khazanah said an independent evaluation panel comprising five senior professionals from the public and private sector with extensive postal and corporate experience had evaluated all the bidders’ proposal on the basis of anonymity, where the bidders’ names were coded.
It said was to ensure the panel members evaluated the strategic and business plan component purely on the basis of the content of the submission, without being prejudicial to the identity of the bidders.
The panel, with the assistance of Khazanah’s advisors, evaluated the strategy and business plans first. Based on this, the bidders were shortlisted to a final two. Subsequently, the offer price envelopes were opened and evaluated compositely.
Both shortlisted bidders were given the opportunity to present to the panel. The panel’s evaluation was based on a composite score between strategy and pricing, whereby strategy accounted for 60% and pricing 40%. Based on the composite score, the panel unanimously recommended DRB-HICOM.
Azman said: “There was a fit and proper test of the new majority shareholder which includes promoting the sustainable development of the Universal Service Obligations (USO), as well as the commitment to retain existing staff in their business plan.”
“The commitment to fulfil the social obligations under the USO (as required under the Postal Services Act, 1991) is crucial as postal services have an impact on the Rakyat, especially for those residing in remote or rural areas.”
Khazanah’s emphasis on strategy and business plans within the evaluation process does not in itself make any assumption of control or otherwise. The process required bidders having to state, in their own opinion, whether a general offer would be necessary or not as their own circumstances dictate.
Khazanah’s executive director of investments, who was the project director for this strategic divestment, Mohammed Rashdan Mohd Yusof said:
“It is the buyer’s prerogative, and not of the seller, to determine whether a GO is necessary, as only the buyer can ascertain the extent of control they exert over Pos Malaysia after they acquire the 32% stake. Furthermore, the divestment process did not reveal any information to the bidders beyond readily available market information.”
On this point, Azman said: “As a responsible seller to stakeholders including minorities and the Rakyat, our emphasis on business strategies and credibility of the bidders was to ensure that the successful bidder, via the board members they intend to proportionately install with their 32% stake, have a robust business plan to both deliver on their USO and unlock value and for them to discuss at the Pos Malaysia board.”
1 comments:
hope DRB will increase the value of pos and khazanah still holding RPS and the price can be adjusted s.t. land usage (act to be amended)