Lembaga Tabung Haji substantial shareholder in DRB-Hicom

CIMB Equities Research has upgraded DRB-Hicom from Hold to Add with a higher target price of RM1.60

KUALA LUMPUR: Lembaga Tabung Haji (LTH) has emerged as a substantial shareholder in diversified group DRB-Hicom Bhd with a 5.08% stake.

Filings with Bursa Malaysia on Monday showed the pilgrimage fund bought one million DRB-Hicom shares from the open market on March 1. The following day, its bought 750,000 shares.

On March 3, it bought another one million shares.

The recent acquisitions saw it owning 5.086% or 98.31 million shares.

DRB-Hicom's share price had risen in recent months following news about its plans for a foreign strategic partner to work with its loss-making Proton Holdings Bhd, which includes taking a stake.

Two companies reported to be keen to be  strategic partner are China's Zhejiang Geely Holding Group Co. and France's PSA Group.

However, DRB-Hicom's share price had fallen since last Friday on a Bloomberg report that billionaire Li Shufu said he’s planning to pull Zhejiang Geely out of a bid for Proton.

Bloomberg reported Li as saying DRB-Hicom keeps changing its plans.

Both companies have submitted bids to buy a stake in money-losing Proton, which needs to bring in a foreign partner to help in research and development as part of conditions it agreed to in order to receive a loan last year.

Last week, PSA CEO Carlos Tavares said last week that a decision on the Proton bid is expected in spring.

Proton owns British sports car maker Lotus Cars Ltd.