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Monday, July 21, 2008

Gamuda gains on report bid has support

GAMUDA Bhd, Malaysia’s second-biggest builder, rose the most in a week in Kuala Lumpur trading after a newspaper reported the company’s largest shareholder supports a takeover bid by a Middle Eastern fund.

At 12.30am, the stock rose 9 sen, or 3.7 per cent, to RM2.52, headed for its biggest advance since July 14.

A Middle Eastern fund has gathered enough support to make a takeover bid for the construction company, the paper reported, without saying where it obtained the information.

Gamuda’s largest shareholder, the Malaysian royal family in Perak, agreed to sell its 7.5 per cent stake to the fund, the paper reported. The acquisition of the royal family stake is crucial to any takeover, according to the newspaper.

Such a bid “is not attractive enough for the privatization to succeed,” Vincent Khoo, who has a “buy” rating on Gamuda at Aseambankers Malaysia Bhd., said in a report today. “The stock is still trading significantly below its core net assets value of RM2.90.”

Gamuda stock has tumbled this year after managing director Lin Yun Ling sold most of his stock.

By Bloomberg

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