UMW’s proposed takeover of MBM hangs in the balance

It seems increasingly unlikely that the deal will go through, says a source, after Zeti takes the helm at PNB from Abdul Wahid


UMW Holdings Bhd’s proposed RM1 billion takeover of MBM Resources Bhd now hangs in the balance following the leadership change at Permodalan Nasional Bhd (PNB).

UMW has PNB as a substantial shareholder, and the idea to push for MBM and for greater control of carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) also involve stakes owned by the country’s largest fund.

Early this month, former Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz was appointed PNB group chairman after the exit of Tan Sri Abdul Wahid Omar.

An industry source said there are uncertainties over the proposed deal now that there were changes at the helm at PNB. “It seems increasingly unlikely that the deal will go through,” the source told The Malaysian Reserve (TMR).

UMW made an offer to Med-Bumikar Mara Sdn Bhd and Central Shore Sdn Bhd to buy their 50.07% combined stake in MBM for RM501 million, or RM2.56 per share, subsequently raising UMW’s shareholding in Perodua by 22.58% via MBM.

UMW is also acquiring PNB Equity Resource Corp Sdn Bhd’s (PERC) 10% stake in Perodua for RM417.5 million. PERC is wholly owned by PNB.MBM and PERC’s acquisition will raise UMW’s stake in Perodua from the current 38% to 70.6%.

Perodua, in which MBM has a 22.58% stake, is the largest local manufacturer of automobiles and profitable.

But UMW’s proposal to bump up its stake in Perodua has been “muted” after the 14th General Election results and subsequent changes in the country’s leadership.

Another source said the question about the deal also now lies with government agency Majlis Amanah Rakyat (Mara), the biggest and only institutional shareholder of Med-Bumikar with an almost 30% stake.

The source said the stakeholders are also waiting for the minister who is responsible for Mara and leadership in the agency itself.

Daihatsu Motor Co Ltd has communicated its views over the proposed takeover of MBM and control of Perodua to the government.

An industry source said Perodua’s Japanese shareholder and technology partner has sent the letter to Prime Minister (PM) Tun Dr Mahathir Mohamad recently.

“They have communicated to the PM via a letter about one or two weeks ago,” the source said.

TMR recently reported that Daihatsu wanted to meet Dr Mahathir during his recent visit to Japan last month. The meeting has yet to take place.

Earlier reports suggested that Daihatsu was not in favour of the acquisition, citing preference for the status quo to remain with no single controlling shareholder in Perodua.

It is not known whether the proposed takeover would lead to Daihatsu’s exit as Perodua’s technology partner.

MBM announced to Bursa Malaysia last Friday that the company has appointed Dr Muhammad Iqbal Shaharom as acting president and CEO after the retirement of previous CEO Nor Hadi Daud.

Muhammad Iqbal is also the MD of Daihatsu (M) Sdn Bhd, a 51.5%-owned unit under MBM Resources.

Presently, Perodua’s shareholdings are UMW (38%), MBM (20%), PERC (10%), Daihatsu (20%), Daihatsu Malaysia (5%), Mitsui Group (4.2%) and Mitsui & Co (Asia Pacific) Pte Ltd (2.8%).

UMW has extended its offer period for the proposed acquisition to Oct 31, 2018, from its initial date of April 30.

Meanwhile, Bernama reported that Zeti would work closely with the governmentlinked investment company for the sustainability of PNB’s performance and contribution to the overall economy.

Zeti will also carry on with her duty as a member of the Council of Eminent Persons.

Zeti said she will go through the details of her predecessor’s plan before she can comment on the roadmap for PNB.