KUALA LUMPUR: Khazanah Nasional Bhd (Khazanah) divesting its 32.21 per cent stake in Pos Malaysia Bhd (Pos Malaysia) to DRB-HICOM Bhd (DRB-HICOM) 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 (Special Share) in Pos Malaysia held by Minister of Finance (Incorporated) (MoF Inc).
This condition precedent is not within Khazanah’s control, as it is the sole prerogative of MoF Inc to make any modification on the Special Share.
Khazanah’s managing director, Tan Sri Dato’ Azman Haji 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.”
Deemed as a landmark divestment as it is Khazanah’s first divestment of its entire stake in a major GLC, Khazanah adopted a robust strategic divestment process which involved an open bidding process and a merit-based and transparent selection process.
Conducted in two stages – the first stage involved addressing key aspects of Pos Malaysia’s macro business and regulatory environments, while the second stage revolved around the restricted tender process. Both stages ran concurrently.
Stage one saw the resolution of the long-running issue relating to the salary of postmen and revision of postal tariffs. The postal rate revision took effect in July 1, 2010 and subsequently, Pos Malaysia also resolved a long outstanding pay revision for postmen in the same month.
Stage two started with the Pre- Qualification phase, where Khazanah appointed CIMB Investment Bank (CIMB) and McKinsey & Company (McKinsey) as advisors for the transaction.
CIMB assisted Khazanah in identifying parties who would be interested in purchasing Khazanah’s stake in Pos Malaysia, including both local and foreign parties.
A total of 48 parties were approached to submit their respective proposals, out of which 10 parties expressed their interest to participate and were prequalified at the Pre-Qualification phase. Khazanah then proceeded to the Indicative Bid phase where 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.
Azman explained, “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 fulfill 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.