January 18, 2011

PLUS - ECM Libra keeps 'hold' call on PLUS

Stock Name: PLUS
Company Name: PLUS EXPRESSWAYS BHD
Research House: ECMLIBRA

ECM Libra is maintaining a "hold" on PLUS Expressways Bhd, following its announcement that it will not evaluate, consider or table Jelas Ulung Sdn Bhd's takeover offer at RM5.20 per share.

"There is uncertainty whether PLUS will be able to secure minority shareholders' approval as the question may arise whether the board has done all it can to extract the best return for its shareholders," ECMLibra said in a research note today.

The UEM-EPF offer of RM4.60 a share is lower in value when compared with Jelas Ulung's offer of RM5.20 a share.

The research house, however, reiterated that PLUS's share price never breached RM3.50 per share before July 2010, thus giving a majority of its shareholders a premium of some 31 per cent.

ECMLibra said the UEM-EPF offer had government blessings and removed concerns over strategic national assets being controlled by a little known private company.

The research house adjusted its target price to RM4.60 reflecting the only confirmed offer of RM4.60 put in by UEM-EPF.

In mid-December, Jelas Ulung came into the picture with its RM5.20 per share or RM26 billion offer, a higher offer by 13 per cent, just days before the PLUS extraordinary general meeting to vote on the proposed acquisition by UEM-EPF.

However, Jelas Ulung's failure to meet the deadline of placing a RM50 million deposit required by PLUS left only one formal offer on the table, which is the UEM-EPF offer of RM4.60 per share. -- Bernama

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