UMW abandons MBM bid

With lapse of both offers for MBM and Perodua, UMW also abandons rights issue to raise RM1.1b


UMW Holdings Bhd has abandoned its proposed takeover of MBM Resources Bhd as the offer period ended yesterday.

No clear reason was given, but UMW’s filing to the exchange yesterday noted its board decided not to extend the RM2.56 sen a share offer tabled for Med-Bumikar Mara Sdn Bhd and its wholly owned subsidiary, Central Shore Sdn Bhd, a 50.07% stake in MBM, nor a 10% equity interest in Perusahaan Otomobil Kedua Sdn Bhd (Perodua) from  PNB Equity Resources Corp Sdn Bhd (PERC).

With the lapse of both the MBM and Perodua offers, UMW will not be undertaking the proposed renounceable rights issue of new ordinary shares to raise gross proceeds of up to RM1.1 billion.

UMW president and group CEO Badrul Feisal Abdul Rahim (picture) said the company has recalibrated its corporate strategy in line with its on-going transformation efforts and will focus on improving its financial performance.

“We would like to reaffirm our commitment to enhancing the performance of our automotive segment, expanding further into high-value manufacturing, as well as increasing our product range and market presence for our equipment segment. We believe this will further strengthen our overall financial position, which will enable us to remain resilient in the increasingly challenging business environment,” he said in a statement yesterday.

Badrul Feisal said the group remains optimistic in exploring opportunities in the domestic market, as well as expanding its global footprint.

UMW’s bid for MBM was initially rejected by the latter’s board, which viewed the offer as unreasonable. UMW did not increase the bid price, claiming that the RM2.56 share offer was a premium of 13.3% to MBM’s five-day volume weighted average market price of RM2.26 at the time.

Perodua’s principal, Daihatsu Motor Co Ltd, was also reported to be not in favour of the acquisition, citing its preference for the status quo to remain with no single controlling shareholder in the country’s car market share leader.

MIDF Amanah Investment Bank Bhd Research (MIDF Research) had expected the offer to buy out MBM’s major shareholder to lapse yesterday.

“While it would have been an opportunity for MBM’s minority shareholders to exit a value trap, unfortunately, we gather that Med-Bumikar did not respond to the offer.

“This also means UMW’s shareholding in Perodua will remain status quo at 38%,” MIDF Research said in a report yesterday.

UMW had offered to buy a 10% interest in Perodua from PERC for RM417.5 million or RM29.80 sen a share.

A successful bid would have raised UMW’s grip on Perodua to 70.6%.


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