A worker checking a SPLASH water treatment plant.
KUALA LUMPUR: PublicInvest Research has maintained its neutral call on Gamuda Bhd
with a target price of RM3.80 as its earnings estimates remain unchanged pending more clarification from management.
Gamuda has announced that its 40%-owned associate company, Syarikat Pengeluar Air Selangor Holdings Bhd (SPLASH), had received a letter of offer from Pengurusan Air Selangor Sdn Bhd to acquire from SPLASH Holdings its entire stake in SPLASH for a sum of RM2.55bil at 28% discount to its book value.
PublicInvest noted that this is the lower end of the RM2.5bil to RM2.7bil buyout deal reported at end-2016.
The offer is valid until Aug 10 and a sale and purchase agreement will be entered into no later than Sept 14.
"This, in our view, will finally offer a resolution for the protracted SPLASH debacle," said the research house.
It noted that 0.72x book value, SPLASH would need to realise a loss of disposal of about RM992mil.
Gamuda resumes trading today following its suspension since last Friday. The stock was last traded at RM3.88 a share.
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