KUALA LUMPUR: Puncak Niaga’s shares and warrants extended their gains early Wednesday after it accepted a RM1.6bil cash takeover offer for its two water concession assets from the Selangor Government.
At 9.05am, the share price was up 12 sen to RM3.24 with 1.39 million shares done while Puncak-WB added 11 sen to RM2.29.
The FBM KLCI rose 2.36 points to 1,878.97. Turnover was 57.43 million shares valued at RM399.21mil. There were 166 gainers, 76 losers and 159 counters unchanged.
CIMB Equities Research expects Puncak Niaga's share price to rally after announcing it accepted a RM1.6bil cash takeover offer for its two water concession assets.
The research house said on Wednesday the timing of the news was a slight surprise but it was overall positive given Puncak's past rejections of the offer.
“Regardless of whether there will be a valuation top-up in view of outstanding receivables, Puncak remains undervalued, as the cash offer is 22% above its market cap, and that without including its oil & gas business.
“We raise our sum-of-parts based target price (to RM4.28 from RM3.21 as our discount reverts to the 20% (from 40%) we ascribed before our stock downgrade in March 2014. We upgrade it back from Hold to Add, with the acceptance of the offer as catalyst,” said the research house.