SP Setia (HOLD) - Closing of the general offer

Stock Name: SPSETIA
Company Name: SP SETIA BHD

Research House: HLG

Price Call: HOLD

Target Price: 3.95

SP Setia (HOLD)

Closing of the general offer

• PNB's GO ("General Offer") for SP Setia at RM3.95 per shareofficially closed on 19th Mar 2012, with overall acceptance level clocking inat 78.95%.
• Given that this causes free float to fall below 25%, the Joint Offerorswill need to issue a proposal to resolve this issue, given that they haveundertaken to maintain the listing status of SP Setia.
• We regard the closure of the GO as positive as it allows SP Setia tofully focus on meeting their RM4.0bn sales target for 2012.  But at thesame time, a free float of 25% would mean SP Setia's free-float adjusted marketcap stands at RM1.83bn vs. RM2.83bn for UEM Land. 
• We maintain our HOLD recommendation and target price of RM3.95, which isthe offer price.

 Source: HLIB Research 20 March 2012