KUALA LUMPUR:'' Shares of PLUS EXPRESSWAYS BHD [] fell on Monday, Oct 18 as investors viewed limited upside for the UEM Group Bhd and the Employees Provident Fund (EPF) offer of RM4.60 per share as the takeover process could be lengthy.
At 4.29pm, it was down 12 sen to RM4.36 with 29.6 million shares done. The FBM KLCI was down 8.87 points to 1,480.99 in line with the weaker key regional markets and also European bourses.
UEM and EPF said in a joint statement on Friday, Oct 15''they would set up a co-investment vehicle to make the offer to PLUS. The special purpose vehicle (SPV) will be 51% owned by UEM Group, with the remaining 49% owned by EPF.
Hwang DBS Vickers Research said this offer was not a general offer and minorities will receive cash payment via special dividends and a capital repayment later that would be equivalent to RM4.60/share.
'We see limited upside to the offer price and investors may want to take profit as the process could be lengthy and a capital repayment requires High Court approval. The offer price is also at 9.5% premium to our DCF-derived TP of RM4.20 (WACC 6.1%, beta 0.7x),' it said.
The research house said the'' SPV may face challenging times.There is no clarity on PLUS' toll rates in the longer term, but Budget 2011 disclosed that toll rates for all of PLUS' 4 concessions would remain flat for the next five years.
At 4.29pm, it was down 12 sen to RM4.36 with 29.6 million shares done. The FBM KLCI was down 8.87 points to 1,480.99 in line with the weaker key regional markets and also European bourses.
UEM and EPF said in a joint statement on Friday, Oct 15''they would set up a co-investment vehicle to make the offer to PLUS. The special purpose vehicle (SPV) will be 51% owned by UEM Group, with the remaining 49% owned by EPF.
Hwang DBS Vickers Research said this offer was not a general offer and minorities will receive cash payment via special dividends and a capital repayment later that would be equivalent to RM4.60/share.
'We see limited upside to the offer price and investors may want to take profit as the process could be lengthy and a capital repayment requires High Court approval. The offer price is also at 9.5% premium to our DCF-derived TP of RM4.20 (WACC 6.1%, beta 0.7x),' it said.
The research house said the'' SPV may face challenging times.There is no clarity on PLUS' toll rates in the longer term, but Budget 2011 disclosed that toll rates for all of PLUS' 4 concessions would remain flat for the next five years.
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