PETALING JAYA: The New Straits Times Press (M) Bhd (NSTP) and Utusan Melayu (M) Bhd are still in merger talks but they "have yet to reach a definitive agreement in relation to the terms of such merger."
In a joint statement to Bursa Malaysia Monday, the newspaper publishers said the companies' board of directors had been "exploring ways to enhance the value of both groups via a possible merger."
"Utusan and NSTP intend to continue to explore and discuss this matter further and have entered into a non-disclosure agreement to govern the period of discussion," the companies said.
An immediate announcement shall be made to the exchange should a final agreement materialise, they added.
The shares of NSTP and Utusan were suspended on Friday pending a material announcement but the press conference scheduled for Monday afternoon was called off in the morning.
According to the joint statement issued by NSTP and Utusan to the press in the morning, "the press conference scheduled for Monday has been postponed until further notice."
In a subsequent filing to Bursa, the companies said their respective shares would resume trading today.
A source told StarBiz that the talks would continue, "until everyone gets what they want from the merger."
One of the main concerns was the independency of Utusan Malaysia as the Malays shared strong sentiment for the oldest Malay newspaper in the country, the source said, adding that more assurance would be given that the paper would continue to exist.
UOBKayHian said in a research note that the potential merger would bode well for the companies. It noted that Utusan shares were trading at a "depressed valuation" of price-to-earnings of 9.4 times compared to the sector's average of 21.3 times.
Furthermore, there would be potential cost savings from bulk purchasing of newsprint and consolidation of back-office operations, the brokerage added.