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Wednesday, October 12, 2011

SP Setia's major shareholders seeing eye to eye

KUALA LUMPUR: The major shareholders of SP Setia Bhd have appeared to patch up their differences, after a joint statement by both the property developer and Pemodalan Nasional Bhd (PNB), say analysts.

This has also meant that SP Setia chief executive officer (CEO) Tan Sri Liew Kee Sin is now less likely to seek a higher takeover bid.

"Market talk was that PNB and Liew did not see eye to eye on some issues, particularly on PNB's intention to have more say in the company. The statement yesterday certainly squashed market rumours and addressed the concerns of investors, employees and business partners.

"With the statement, it is also less likely that Liew will be seeking for higher bidders, as this may not look professional," said a research head from a local brokerage.

Early this week, PNB in a statement, said it wants Liew to remain at the helm of SP Setia and the existing management team to continue to manage the company. It added that "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 statement, added that he was "heartened" by the reassurance from PNB president Tan Sri Hamad Kama Piah.

To recap, about two weeks ago, PNB announced a conditional takeover offer for SP Setia, which involves PNB buying SP Setia shares it does not own for RM3.90 a piece and warrants it does not own for 91 sen each.

The takeover bid, which appears to be hostile, was immediately rejected by Liew on the same day, saying that the offer undervalues the company. He asked PNB to reconsider higher offer and said it will seek offers from rival bidders.

The takeover is conditional upon when PNB receives more than 50 per cent of shareholders accepting the offer.

Since PNB's announcement, the group has increased its shareholding from about 33.2 per cent to about 38 per cent in SP Setia, mainly via the open market.

However, interestingly, it appears that PNB's acquisition from the open market has slowed lately.

This week, SP Setia's average daily trading volume is about one million shares a day. In contrast, between September 29 and October 7, its average trading volume was 15 million shares a day.

"It is now likely that investors will just sit out for the time being while waiting for the independent advice circular to be out," said an analyst.

By Business Times

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