KUALA LUMPUR: Sime Darby Bhd expects to appoint independent advisers this week to look into CIMB Investment Bank Bhd's offer to merge Sime Darby with two other plantation groups, Golden Hope Plantations Bhd (GHope) and Kumpulan Guthrie Bhd.
Group chief executive Datuk Ahmad Zubir Murshid said the group would appoint the advisers “as soon as possible'' to enable its board of directors to deliberate on its next course of action and in the interest of its shareholders.
“I believe Sime Darby will need to get both the financial and legal side of the matter prior to making any comments pertaining to the proposed merger,” he told reporters after announcing the group's first-quarter results for the financial year ended Sept 30 here yesterday.
“We just got the offer from CIMB today and it will only be fair for us to get the advice of independent advisers.” Sime Darby has 30 days to reply to the CIMB offer.
Synergy Drive Sdn Bhd, a special purpose vehicle seed-funded by CIMB, will acquire the entire business and undertakings, including assets and liabilities of Sime Darby under the proposed merger.
Zubir said Sime Darby would continue to strive towards increasing shareholdervalue to sustain long-term growth for all its core businesses.
“We expect the second-quarter results to be better, given the higher crude palm oil (CPO) price as well as continued growth in the energy and utilities and heavy equipment sectors,” he said, adding that he expected the CPO to be traded between RM1,800 and RM1,900 per tonne.
The motor division could be affected by the softening auto market currently, he added.
“To grow the motor business, we must continue to look at regional markets, with Malaysia becoming the hub,” he said.
For the first quarter ended Sept 30, Sime Darby posted a slightly lower net profit of RM263.6mil against RM267.5mil inthe corresponding period last year.
Turnover declined to RM5.01bil against RM5.2bil previously while pre-tax profit fell to RM378mil from RM399.2mil before.
Sime Darby said in a statement its equipment division continued to be the largest contributor in terms of profit before unusual items, interest and taxes (PBUIIT), providing 42% of the group's PBUIIT and growing by 13% from the previous corresponding period.
This was largely driven by higher equipment sales in its Australian subsidiary, Hasting Deerings, due to the booming mining industry.
The energy and utility division recorded a growth in PBUIIT of 2.6% while the plantation division improved by 8%, the group said.
Net profit attributable to shareholders fell 1% from RM264mil in the previous corresponding period, on the challenging environment in the motor and property division, it added.