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Tuesday, October 11, 2011

SP Setia's Liew gets 'sweet' offer

Kuala Lumpur: Permodalan Nasional Bhd (PNB) wants Tan Sri Liew Kee Sin to remain at the helm of SP Setia Bhd, following its proposed takeover of the company.

Analysts said if Liew remains as chief executive officer, there is a strong possibility the various funds with sizeable stakes in SP Setia may not accept the takeover offer and instead choose to remain as shareholders in the company.

As at December 23 last year, the various funds, excluding the Employees' Provident Fund, owned close to 19 per cent of SP Setia while as of last Friday, the EPF holds a 14.95 per cent stake.

The funds are not expecting better offers from rival bidders, considering the size of the takeover, which is said to be the biggest in more than two decades.

PNB is offering shareholders RM3.90 a share, as well as 91 sen for every warrant they hold, after it raised its stake in SP Setia to 33.2 per cent last month, exceeding the 33 per cent threshold.

In their first joint statement to Bursa Malaysia, PNB said it appreciated the strong branding of SP Setia, thanks to its entrepreneur-led management team.

"Liew will continue to lead SP Setia as its CEO... the existing management team will also continue to manage the company," said PNB in the statement.

The asset manager also said "it is committed, once markets stabilise, to maintain an appropriate shareholding spread with the capacity to attract not just local but also foreign institutional funds and retail participation".

Liew, in the same statement, said he was "heartened" by the reassurance from PNB president Tan Sri Hamad Kama Piah at their meeting last Friday.

The tycoon, who joined the SP Setia board in 1996, owns 11.26 per cent of the company and is widely recognised as the main driving force behind its transformation into one of the country's biggest property developers.

TA Securities property analyst, Tan Kam Meng, said following PNB's assurance that it would not be involved in the day-to-day operations of SP Setia, it is now unlikely that Liew will accept the (RM3.90 a share) offer.

"This should lend support to the share price as PNB is expected to continue buying SP Setia shares from the open market at any price below RM3.90 per share."

PNB said its involvement in its investee companies is mainly through board representation, while the day-to-day operations are left to professional managers.

Mercury Securities head of reseach, Edmund Tham, said the statement seems to indicate that Liew may not be seeking alternative bidders.

He said since there is no update from AmInvestment Bank as the independent adviser, investors may opt to take up the offer or hold on to the shares.

"The immediate concern for the public investors would be the liquidity of the shares, meeting the public spread requirement (at least 25 per cent) and the listing status."

Liew, meanwhile, reiterated SP Setia board's advice to non-interested shareholders to wait for both PNB's offer document as well as the independent advice circular before deciding on their next move.

When contacted, an SP Setia official said the company needs to see the whole process through before it can comment further.

By Business Times

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