Wednesday, February 9, 2011

CIMB Research sees impasse over Selangor water takeover to remain

KUALA LUMPUR: CIMB Equities Research said the low valuations in the Selangor state government's third takeover offer for water concessionaires are negative and are likely to prolong the acquisition process in the state.

The research house said on Wednesday, Feb 9 this reinforced its concern that the impasse will be difficult to break. With the added motivation of maintaining its political stronghold in the state, the Selangor government is unlikely to give up without a fight its bid for control of water assets and operations, especially with general elections speculated to be in the offing.

'We are still not confident that a second takeover attempt by Syarikat Pengeluar Air Sungai Selangor Sdn Bhd, will go through despite the attractive valuations offered for Puncak Niaga. In view of this, we remain NEUTRAL on the water sector and Hold call on PUNCAK NIAGA HOLDINGS BHD [],' it said.

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