DRB-Hicom wins bid for stake in Pos Malaysia

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KUALA LUMPUR: Conglomerate DRB-Hicom Bhd, owned by business tycoon Tan Sri Syed Mokhtar Albukhary, triumphed against several other rival bids, to win Khazanah Nasional Bhd’s 32.21 per cent stake in Pos Malaysia Bhd.

The deal is worth RM622.79 million or RM3.60 per share.

DRB-Hicom, which intends to take Pos Malaysia to “greater heights”, said the acquisition was in line with the group’s overall strategy to enhance the services sector in the quest to expand its horizon.

“We are optimistic that Pos Malaysia with its extensive network will provide us with the right platform to expand our businesses locally and overseas,” DRB-Hicom’s group managing director, Datuk Seri Mohd Khamil Jamil said.

The deal will be financed by internally generated funds and bank borrowings.

Apart from new businesses and an expansion programme, the synergies that can be created within the Group is vast, he said in a statement here yesterday.

“(One of the) goals is to revitalise the logistics business in Pos Malaysia, of which the domestic logistics’ market size is over RM27 billion,” DRB-Hicom’s group director, corporate and services, Datuk Khalid Abdol Rahman said.

Pos Malaysia, he added, could also pursue strategic alliances with domestic and global players, to achieve a quicker entry into the logistics sector.

Khazanah in a separate statement said DRB-HICOM was chosen based on its overall bid, which offers not only a defined strategy but also an executable business plan, and an acceptable offer price.

“DRB-Hicom’s strategy and business plan provides an effective platform for Pos Malaysia to grow, if adopted by the latter as a whole,” Khazanah’s managing director, Tan Sri Datuk Azman Mokhtar said.

The divestment is deemed a landmark exercise as it is Khazanah’s first such move for an entire stake in a major government-linked company.

The government’s investment arm said it adopted a robust strategic divestment exercise which involved an open bidding, merit-based and transparent selection process.

Elaborating on the divestment, Khazanah said the offer price of RM3.60 per share was subject to the modification of the special rights redeemable preference share in Pos Malaysia, held by the Minister of Finance.

This modification inter alia, includes the reservation to appoint up to two Board members in Pos Malaysia, the removal of rights to appoint the chairman and managing director of the company and fix their respective remuneration such that these become matters for determination by its Board of Directors.

The conditional offer price is also subject to the variation in the use of 16 plots of identified lands owned by the Federal Lands Commissioner and leased to Pos Malaysia, said Khazanah.

The current terms of the lease allows for only postal services use, while the variation provides for the inclusion of commercial use, over and above the mandatory postal use, it added.

“In the event the variation does not happen by Dec 31, 2011, DRB-Hicom will be refunded 10 sen per share or RM17.30 million,” said Khazanah.

On a possible general offer (GO), Khazanah said the process required bidders having to state, in their own opinion, whether it would be necessary or not, as their own circumstances dictate.

At 5pm Pos Malaysia’s share rose two sen to RM3.37 but DRB-Hicom slipped two sen to RM2.30. — Bernama