Wednesday, October 5

ExxonMobil must clarify Boustead’s statement

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KUALA LUMPUR: The onus is now on ExxonMobil Corporation to clarify Boustead Holdings Bhd’s (BHB) position that it has no intention of closing down Esso Malaysia’s Port Dickson refinery when submitting its bid for ExxonMobil’s downstream assets in Malaysia.

ExxonMobil, at a press conference on August 28, said San Miguel Corporation’s offer was the only one among 20 bids which had included plans to expand the 48-year-old refinery.

However, BHB revealed on Tuesday that its bid for Esso Malaysia was made on the basis of business continuity whereby the refinery would be operating as usual and that there would not be any staff lay-offs.

It also said the information released to the press on August 28 by ExxonMobil on its sale of 65 per cent of Esso Malaysia and other downstream assets in Malaysia to San Miguel Corporation contained inaccuracies.

Analysts said these needed to be clarified by ExxonMobil. They also said that since it was a purely commercial deal, ExxonMobil, as the vendor, had to explain how San Miguel’s offer was the best deal on the table and perhaps indicate how much of a premium it was compared with other offers.

ExxonMobil also needed to clarify its statement on Aug 28 that only San Miguel’s bid included plans to expand the refinery when Boustead had also indicated likewise in its statement to Bursa Malaysia.

Otherwise, it could be misconstrued as a mispresentation of BHB’s offer, the analysts said.

ExxonMobil also owed an explanation to Esso Malaysia’s minority shareholders and to the Malaysian public in view that Esso Malaysia is a strategic asset and has been in the country for more than 100 years.

Analysts said these innaccuracies needed to be clarified and perhaps, the ministries, which would have to approve the deal, needed to clarify with ExxonMobil about this before making their decision.

BHB said that it submitted a fair and competitive offer in terms of price in July to ExxonMobil for its downstream assets, which included the 65 per cent stake in Esso Malaysia Bhd, a 100 per cent stake in ExxonMobil Malaysia Sdn Bhd and 100 per cent of ExxonMobil Borneo Sdn Bhd.

“BHB noted that the average share price of Esso Malaysia for the period from Jan 3 to June 30 was RM3.943 per share,” they said.

They added BHB’s bid for the 65 per cent shares in Esso Malaysia Bhd took into consideration the relevant interests of minority shareholders. — Bernama