Highlight EPF accepts takeover offer for MISC

Highlight EPF accepts takeover offer for MISC
In The Edge Financial Daily Today 2013
Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com
Friday, 12 April 2013 09:49


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KUALA LUMPUR: The Employees Provident Fund (EPF) has accepted Petroliam Nasional Bhd’s (Petronas) conditional takeover offer for MISC Bhd.The EPF is the largest minority shareholder with 9.5% equity interest.

The provident fund’s acceptance of the takeover bid should prompt other institutional funds to follow suit, especially the government-linked Skim Amanah Saham (SAS) that holds a6.35% stake, said investment analysts.

The acceptance came after Petronas raised its offer price by 20 sen to RM5.50 from RM5.30 at the 11th hour before the closing of the takeover offer last Friday.

In a filing with Bursa Malaysia, MISC said Petronas had received valid acceptances from the EPF of 424.2 million shares, equivalent to 9.5% equity interest, yesterday.

With the offer of an additional 20 sen for each MISC share, the EPF will receive an additional RM84.84 million from the privatisation exercise.

The national oil firm now has 3.56 billion shares in hand, which represent a 79.77% stake in the shipping giant, compared with barely 70.25% last Friday.

Previously seen as a deal breaker, the EPF’s acceptance will now help to pave the way for MISC to be taken private.

The EPF and SAS, which collectively hold 15.85% equity interest, are seen as the crucial factors for the privatisation exercise. Petronas’ buyout offer is conditional upon it having 90% equity interest at the closing date or the takeover offer would lapse. Petronas would then return all shares it received from the minority shareholders.

To reach the required 90% shareholding, Petronas would need acceptances of about 456.5 million shares, or 10.23% equity interest.
Some analysts said MISC’s shares trading below the offer price of RM5.50 after the revision of the offer is an indicator that the investing fraternity, although it may not represent all minorities, finds the revised offer more reasonable.

But some quarters deem Petronas’ takeover offer, even after the national oil firm revised the offer, unattractive. They believe there should be a higher premium to price in MISC’s future prospects as the privatisation would deny them the opportunity to ride the shipping giant’s recovery, although it might only come two or three years down the road.

On the other hand, if shareholders don’t want to accept the offer, they would probably suffer large paper losses as the share price is likely to fall back to the pre-offer level or even lower, considering the current gloomy outlook for the shipping industry.


This article first appeared in The Edge Financial Daily, on April 12, 2013.