Management buyout of Proton possible

Proton Holdings Bhd managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir has suggested that he and other senior company executives will be keen to buy over the national carmaker if offered.


“If we are offered (to bid for Proton), it is worth considering,” Syed Zainal told Business Times via a telephone interview.

Speculation is rife that Syed Zainal and Proton chairman Datuk Mohd Nadzmi Mohd Salleh have jointly bid for the company.

Syed Zainal, however, dismissed it as “mere speculation” and said that no management buyout (MBO) plan had been submitted to the government.

Such rumours sent Proton shares higher yesterday, becoming the second top gainer on Bursa Malaysia.
The stock close 32 sen higher at RM3.53 with 77.1 million shares traded.


Analysts said the steep rise in the share price may be due to talk that Khazanah Nasional
Bhd, which is currently Proton’s single largest shareholder, has found a buyer for it.

“There is talk that the buyer could be Nissan or DRB-HICOM Bhd. The current board of Proton may plan an MBO as they see value in the company, which is currently trading at 0.5 times the book value,” an analyst at Maybank Investment Bank told Business Times.

Proton, which has a market capitalisation of about RM600 million, has about RM1 mybillion cash.

Both its plants in Shah Alam, Selangor, and Tanjung Malim, Perak, are currently under utilised, offering great potential for growth.

Last year, Proton’s domestic sales volume grew 3 per cent to 162,012 units, supported by its popular models like Saga, Persona, Exora and Inspira.

“The board is expecting that its wholly-owned unit Lotus Group International Ltd will turn around in 2013. It will be a shame to let go now,” the analyst said.

An analyst from TA Research believes the rise in the company’s stock could be because Proton and Japan’s Mitsubishi Motors Corp are close to inking a formal agreement to come up with new models.

Proton’s first-quarter net profit ended June 30 2011 was lower, dragged by expenses associated with the ongoing turnaround programme at Lotus Group.

The company saw its earnings in the quarter fall 93 per cent to RM4.5 million from RM84.6 million a year ago.