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AWSJ: Malaysian Government Declines To Sweeten Bid to Take Over UEM

29/7/2001 9:28 pm Sun

[Banyak pihak yang tidak bersalah hangus dalam projek besar Mahathir kali ini. Sudahlah mereka dipijak pada ketika Halim dulu kini mereka terkena lagi di saat Halim akan dinyahkan pergi. Padahal semua ini boleh dielakkan jika semua pihak melaksanakan tanggungjawab kepada pelabur - bukan kepada kepentingan politik. - Editor]

The Asian Wall Street Journal
28th July 2001

Malaysian Government Declines To Sweeten Bid to Take Over UEM

Associated Press

KUALA LUMPUR, Malaysia -- The Malaysian government declined Friday to sweeten a bid to take over construction giant United Engineers Malaysia Bhd., the first step in taking control of debt-ridden Renong Bhd., the country's largest conglomerate.

The investment vehicle spearheading the takeover, Syarikat Danasaham Sdn. Bhd., issued a statement rejecting market speculation that it could sweeten the bid by giving minority shareholders the proceeds from the sale of land owned by Prolink, a unit of Renong.

"We will not be revising the offer price of 4.50 ringgit ($1.18), nor offer additional consideration to UEM minority shareholders," it said.

The sale of 1,000 acres (400 hectares) of Prolink land being held by UEM in trust for minority shareholders was already calculated into the offer, the statement said.

Danasaham said that all holders of ordinary shares would be offered the same price of 4.50 ringgit per share, as stipulated in Malaysia's takeover and merger rules.

Analysts have said that UEM's minority shareholders could lose in the takeover, especially the Employees Provident Fund, Malaysia's largest pension fund. It owns 9% of UEM, and bought much of the stake at more than 10 ringgit per share in 1997.

Danasaham, a wholly owned unit of government investment arm Khazanah Nasional Bhd., has stipulated its offer hinges on getting 90% of UEM's shares.

Due to a cross-shareholding between the companies, taking over UEM means taking over Renong. The government hopes to chip away at the 13 billion ringgit ($3.4 billion) mountain of debt owed by the companies to local and foreign financial institutions.

The moves are seen as a sign that the government is seeking new ways to come to grips with the debt wreckage left by the Asian financial crisis of 1997-98, when highflying Renong and other big Malaysian companies were battered by the regional meltdown.

Confusion over the Prolink land arose following a Danasaham briefing for analysts Tuesday, in which company directors were asked about possible additional dues to minority shareholders from the land.

Comments reported in newspapers Friday gave the impression the company was considering using Prolink as a possible sweetener for the deal.