UMW closing in on Perodua

Med-Bumikar shareholders vote to sell stake in MBM

PETALING JAYA: UMW Holdings Bhd is one step closer to taking a majority stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua) after shareholders of Med-Bumikar Mara Sdn Bhd, who collectively hold 52.06% of the outstanding shares, voted to sell its 50.07% stake in listed auto group MBM Resources Bhd to UMW.

According to sources, dissenting minority shareholders of Med-Bumikar – who collectively hold 48% in the private company – had walked out of the EGM after it was convened yesterday, questioning the validity of the meeting.

The dissenting shareholders comprise founding families that have between 11% and 13% stakes each in Med-Bumikar.

Med-Bumikar has seven shareholders, with the single largest shareholder being Majlis Amanah Rakyat (Mara) with a 29% stake. The remaining stakes in the private company are held by six founding families.

StarBiz had reported that Mara had the support of at least two founding families, namely, the Looi and Wong families.

In a statement yesterday, Mara said that any decision by the government agency pertaining to the matter was strictly guided by the potential strategic benefits brought to Mara as an entity, and also to the nation.

“At the said EGM, 52.06% of the total issued ordinary share capital of Med-Bumikar had approved and voted in favour of the EGM resolution to accept the UMW offer, subject to certain requirements and conditions.

“In addition, the shareholders also recommended the board to form a task force committee in the negotiation with UMW, acting in the best interest of the company.”

The government agency said moving forward, the decision of the shareholders would be communicated to the board of directors for their further action.

It said any decision by Mara on the matter is strictly guided by the potential strategic benefits brought to Mara as an entity, all Mara stakeholders, and to the nation.

On April 14, StarBiz reported that UMW was likely to seal the deal at the Med-Bumikar level with the scheduled EGM that was prompted by Mara.

MBM, in turn, owns a direct 20% interest in Perodua, which is one of the two home-bred carmakers.

Last week, dissenting shareholders, led by executive chairman Datuk Abdul Rahim Abdul Halim, who are opposed to UMW’s offer at RM2.56 per MBM share, had reportedly filed an injunction to stop the EGM, but the application was dismissed by the Kuala Lumpur High Court.

Med-Bumikar’s board had earlier rejected the offer on the basis that it undervalued MBM.

However, before UMW can have Perodua in the bag, there are conditions precedent that will have to be fulfilled by UMW, including the consent by joint-venture partners such as Daihatsu Motor Co Ltd of Japan.

One is that existing shareholders in Perodua have the first right of refusal in the event an existing shareholder wishes to sell a stake.

StarBiz had earlier quoted sources as saying that Daihatsu was not in favour of UMW’s consolidation of Perodua.

Some observes think that the disgruntled shareholders have an option to contest the decision, but others think that shareholders’ wishes have been conveyed and the board of directors of MBM have a duty to act on the resolution.

If the EGM vote is accepted, it would see UMW gaining a majority stake in MBM in a deal that would cost UMW some RM501mil and value the entire MBM at about RM1bil.

At the Perodua level, UMW would end up with close to 70.6% from its current 38% following its proposal to also buy its parent Permodalan Nasional Bhd’s 10% in the carmaker for RM417.5mil, or RM29.80 apiece.

Last Friday, UMW extended the deadline to take over MBM by six more months.

The conglomerate said that it intends to undertake a mandatory general offer at the same price to privatise MBM.

MBM’s other substantial shareholder is the Employees Provident Fund with a 15.87% interest, while insurance company AIA Bhd has 4.2%.

Shares of MBM closed unchanged at RM2.39, while UMW was down by four sen to RM6.11 yesterday.

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