KUALA LUMPUR: OSK Research is maintaining a Neutral recommendation on MALAYSIAN RESOURCES CORP [] Bhd (MRCB), but revert to a lower target price of RM2.05 based on sum-of-parts valuation after the merger plan with IJM Land Bhd fell through.
The research house said on Monday, Jan 3 it was not really surprised since both parties did not meet the deadline to announce the final agreement on the potential merger, which was to have been wrapped up on Dec 29, 2010.
'With no financial impact on MRCB following the scrapping of the potential merger, we maintain our forecast and NEUTRAL recommendation on MRCB, but revert to a lower TP of RM2.05 based on SOP valuation (which was our previous target price prior to the merger announcement), against our previous TP of RM2.30 based on the merger valuation,' it said.
OSK Research said it believed the negative reaction arising from the aborted merger on MRCB's share price would be rather muted given that the market has generally viewed the proposal as being unfavourable, judging from the negative impact on its shares when the MoU was announced on Nov 23.
Since then, MRCB's share price has been languishing at levels below the pre-MOU period.
The research house said on Monday, Jan 3 it was not really surprised since both parties did not meet the deadline to announce the final agreement on the potential merger, which was to have been wrapped up on Dec 29, 2010.
'With no financial impact on MRCB following the scrapping of the potential merger, we maintain our forecast and NEUTRAL recommendation on MRCB, but revert to a lower TP of RM2.05 based on SOP valuation (which was our previous target price prior to the merger announcement), against our previous TP of RM2.30 based on the merger valuation,' it said.
OSK Research said it believed the negative reaction arising from the aborted merger on MRCB's share price would be rather muted given that the market has generally viewed the proposal as being unfavourable, judging from the negative impact on its shares when the MoU was announced on Nov 23.
Since then, MRCB's share price has been languishing at levels below the pre-MOU period.
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