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KLSE: MBMR       MBM RESOURCES BHD
Last Price Avg Target Price   Upside/Downside Price Call
2.36 2.44     +0.08 (3.39%)
* Average Target Price, Price Call and Upside/Downside are derived from Price Targets in the past 6 months.
** Price Targets are adjusted for Bonus Issue, Shares Split & Shares Consolidation (where applicable).
Date Open Price Target Price Upside/Downside Price Call Source News
02/05/2018 2.39 2.70 +0.31 (12.97%) BUY HLG Price Target News
23/04/2018 2.45 2.70 +0.25 (10.20%) BUY HLG Price Target News
27/03/2018 2.38 2.85 +0.47 (19.75%) BUY KENANGA Price Target News
27/03/2018 2.38 2.70 +0.32 (13.45%) BUY HLG Price Target News
12/03/2018 2.47 2.85 +0.38 (15.38%) BUY KENANGA Price Target News
12/03/2018 2.47 2.70 +0.23 (9.31%) BUY HLG Price Target News
26/02/2018 2.27 2.85 +0.58 (25.55%) BUY KENANGA Price Target News
26/02/2018 2.27 2.70 +0.43 (18.94%) BUY HLG Price Target News
23/02/2018 2.20 2.85 +0.65 (29.55%) BUY KENANGA Price Target News
23/02/2018 2.20 2.68 +0.48 (21.82%) BUY HLG Price Target News
23/02/2018 2.20 2.27 +0.07 (3.18%) HOLD Affin Hwang Capital Price Target News
13/02/2018 2.30 2.68 +0.38 (16.52%) BUY HLG Price Target News
13/02/2018 2.30 2.20 -0.10 (4.35%) HOLD AMMB Price Target News
23/11/2017 2.11 2.45 +0.34 (16.11%) BUY MIDF Price Target News
23/11/2017 2.11 2.20 +0.09 (4.27%) HOLD KENANGA Price Target News
23/11/2017 2.11 2.54 +0.43 (20.38%) BUY HLG Price Target News
23/11/2017 2.11 2.10 -0.01 (0.47%) HOLD Affin Hwang Capital Price Target News


Price Target Research Article/News (past 6 months)
02/05/2018  HLG MBM Resources - Majority Shareholders in Favour of Takeover
23/04/2018  HLG MBM Resources - Visit Note
27/03/2018  KENANGA MBM Resources Bhd - UMW Offer for 50.07% in MBMR Rejected
27/03/2018  HLG MBM Resources - Unattractive Takeover Offer
12/03/2018  KENANGA MBM Resources Bhd - Letter of Offer for 50.07% Stake by UMW
12/03/2018  HLG MBM Resources - UMWH Proposes to Acquire MBMR
26/02/2018  KENANGA MBM Resources Bhd - Better Position in FY18
26/02/2018  HLG MBM Resources - Focus on Cost Efficiency to Lift Earnings
23/02/2018  KENANGA MBM Resources Bhd - FY17 Above Expectations
23/02/2018  HLG MBM Resources - FY17: Above Expectation
23/02/2018  Affin Hwang Capital MBM Resources - Pacing for Growth
13/02/2018  HLG MBM Resources - Acquisition of Remaining 22% Stake in OMI
13/02/2018  AMMB MBM Resources - Consolidating ownership of OMI
23/11/2017  MIDF MBM Resources - Inflection Point Came Earlier Than Expected
23/11/2017  KENANGA MBM Resources Bhd - Broadly Within Expectation
23/11/2017  HLG MBM Resources - 3Q17 in Line
23/11/2017  Affin Hwang Capital MBM Resources - 3QFY17: Within Expectations



  leno likes this.
 
gsi723 2.56 also like inadequate offer... 3.00 only ok...
10/03/2018 22:14
gsi723 Doesn't make sense to pay minority's holder less..
10/03/2018 22:15
cricketlast Hi lau,

Umw does not want to maintain the listing status of mbmr actually.
Please refer to the announcement made by umw holdings. Page 1

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5719957

Thx
11/03/2018 00:40
cricketlast Hi gsi,

Agree with u on the offer being too low. At rm2.56, it only represent 70% of the company's total book value of 3.68.
At least they should have offer something that is near to the book value of mbmr 22.6% in perodua. End of financial year 2016 it was rm1.1b or rm2.80 per share. End of 2017, should be higher.

So agreed that the offer should have been around rm3 for it to be reasonable.
11/03/2018 01:18
BigMoney Yes, the offer is too Low...
11/03/2018 08:36
Lau333 @ Cricketlast, indeed quoted in the announcement on the listing status. Thanks for highlighting. I also concur that UMW undervalue MBMR. Perodua is valued at RM 4.18b. Given MBMR 22.58% stake in Perodua and market capitalization @ RM 2.56 plus debt of RM 1.08b, UMW values other MBMR businesses are mere RM 140m only. At 50.1% stake already acquired, there is still sizeable stake not owned yet... Would UMW be successful in MGO to take MBMR private?
11/03/2018 13:12
Hafid It is fair price because mbmr other business is not making.much money.
11/03/2018 18:24
cricketlast Hi lau,

I am also not sure if the other minorities would accept their low offer. Take epf for example, they have been an investor of mbmr even before 2016 when the share price was traded above rm2.60 (at least since 2012 and most of the time it was higher than rm3.) It was only in 2016 that the share price actually go below rm2.60 level. And given the better prospect of perodua at the moment due to the strengthening of ringgit as well as introduction of new car models (myvi and the new suv expected in 4q18) i can only assume that mbmr financials will only get better. Even the alloy wheel business are showing good growth with breakeven targetted somtime in 2019.

I am not sure that epf would want to divest their stake now with an offer price that really do not take into account the better prospect of MBMR.

I am sure the independent advisor would say that this deal is not fair and not reasonable for the minorities of mbmr.

How much would umw needs for it to take mbmr private? Is it 90%? Hopefully they can revised their offer price if the feedback from minorities are not that great..

What do u think?

Thx
11/03/2018 19:43
Hafid Umw can walk always without the deal. But unlikely.
11/03/2018 20:13
Hafid It just like goldis where it takeover igb at lower price. At the end of the day it go through
11/03/2018 20:13
cricketlast Hi hafid,

Yup. There is always the possibility that it will go thru.

I think for umw the main offer that will need to go through is the current offer to med bumikar (control 50.1% of mbmr). Once they have gotten the majority interest in mbmr, they can consolodate both the income statement and balance sheet into umw financials (however with high non controlling interest portion).

At the same time they will also get majority position in perodua with a total of 59% int (upon completion of pnb equity resources 10% in perodua as well as the int held by mbmr).

Then umw will need to make a decision on whether they want to have mbmr as a listed entity or not. They will need to acquire at least 90% interest (i think, appreciate if someone could confirm this) for them to take mbmr private. For me, anything below the nta (rm3.68) makes sence for umw as it will be a value accreative transaction. And the nta is expected to only go up as long as perodua makes profit (which is most likely the case). Umw is currently trading at 2.2x their NTA.

Anyway for the minorities, if the deal with med bumikar goes through, the min price for the shares that they are holding will be rm2.56. If umw really wants mbmr for themselves, minorities might get a better deal than what is being offered at the moment.

Appreciate any comments.

Thanks.
11/03/2018 21:03
cricketlast Guys,

Extract from a legal website on the privatisation regulation of a listed company:

De-listing
22. What action is required to de-list a company?
The target is allowed to de-list where a takeover offer has resulted in 90% or more of the listed shares being held by the bidder or its PACs. However, in cases where the bidder and its PACs do not hold 90% or more of the listed shares, the target is only permitted to request de-listing where:
The target convenes a general meeting to obtain approval from its shareholders and sends a circular, in the prescribed form, to the shareholders. A separate meeting and circular may be necessary for holders of any other class of listed securities.
The resolution for withdrawal is approved by a majority in number representing 75% of the value of the shareholders (and holders of any other class of listed securities) present and voting either in person or by proxy at the meeting. The proportion of shareholders or holders of other classes of listed securities objecting to the withdrawal at the meeting must not be more than 10% in value.
The shareholders (and holders of other classes of listed securities) are offered a reasonable cash alternative or other reasonable alternative for their shares (exit offer).
An independent adviser has been appointed to advise and make recommendations to the shareholders (and holders of other classes of listed securities) in connection with the de-listing as well as the fairness and reasonableness of the exit offer.
If the bidder has achieved acceptances rendering the offer unconditional, but falls short of the compulsory purchase threshold, the bidder will have to launch a second takeover offer to satisfy the exit offer requirement (see Question 20, Compulsory purchase of minority shareholdings).

website:
https://uk.practicallaw.thomsonreuters.com/0-502-1894?transitionType=Default&contextData=(sc.Default)

Summary:
1) to take private MBMR, UMW will need 90% interest.
2) if not, have to do a general meeting and get 75% voting rights to take it private. AND not more than 10% of the shareholders reject the privatisation proposal.

Thx
12/03/2018 00:23
tonylim correct
12/03/2018 01:14
Lau333 The deal is between UMW as the purchaser and Med Bumikar & Central Shore as the Vendor. Only shareholders of UMW have the right to vote on the deal. Under the takeover rules, UMW is required to extend a mandatory take offer to acquire all the remaining MBMR shares. So, a minority MBMR shareholder doesn’t have the right to vote on the deal but a choice to accept or reject the offer.

2ndly, EPF is an interest party. Latest report indicates EPF has 9.19% stake in UMW (AR2016) and 15.81% stake in MBMR. So, their interest MAY NOT align with minority shareholders. The statement that UMW is not intending to maintain listing status of MBMR gives hint that UMW probably has secured substantial amount of shareholders' commitment to accept the offer. Not too hard to see..add together UMW, EPF and other government based institutional funds, the interested party should hold ~70% of the total share. I would expect more non-government funds to accept as well due to concern of the share liquidities post UMW's acquisition.

MBMR is however obliged to present a 3rd party advice to the shareholders before the acceptance date closure. For those who intend to hold on to the share, the report may represent their last hope to force UMW to raise the offer price. Too bad, shareholders' activism in Malaysia is too weak down to almost non-existance. Things of course would change dramatically better provided another party enters into the frame and starts a bidding war, though chances of that is very very low.
12/03/2018 05:42
dompeilee dompeilee Bought some MBMR @ 2.05...Gonna b sizzling hot soon !:

16/10/2017 16:04

Another JACKPOT after KSSC !!!!!! SOLD 1/2 @ 2.48-2.50!!! :D
12/03/2018 09:18
cricketlast Most analysts (Hong Leong, Kenanga, MIDF, TA securities etc) view the offer price of RM2.56 as unattractive. I am sure that the price has already been agreed with med bumikar and PNB Equity Resources even before the announcement was made last Friday.
PNB is actually the major shareholder of UMW anyway, this could also be seen as a restructuring of PNB holdings in Perodua to be put all in UMW. Better corporate structure for PNB and at the same time help increase the value of UMW.
I think the main question is how much do UMW want MBMR (all to themselves). As i mentioned earlier in my previous comments, anything below the NTA of MBMR (RM3.68) is actually attractive for UMW. But i don't think we can expect UMW to increase their offer to that price.
But i think it would be fairer to the minorities (EPF especially) that has stayed invested in the company during the past 2 years, when ringgit has depreciated and sales deteriorate, to be fairly compensated at valuation of at least 1x book value of their holdings in Perodua (since that is actually the main reason as to why UMW is acquiring MBMR) which is something in the range on RM2.80.

What's your view?

Thx
13/03/2018 05:36
Hafid Maybe the deal will revised. What do you think.
14/03/2018 05:27
Hafid On March 9, UMW offered to buy all the o shares in MBM Resources held by Med-Bumikar Mara and Central Shore collectively representing a 50.07% interest in MBM Resources for RM501mil, or RM2.56 apiece.

Currently, MBM Resources holds a 22.58% effective equity interest in Perodua.

If UMW’s proposal is accepted, then its shareholding will rise from nil to 50.07% in MBM Resources, and UMW will be obliged to extend a mandatory general offer for the rest of MBM Resources’ minority shareholders.

Separately, UMW has also proposed to additionally acquire 14 million ordinary shares, or 10%, in Perodua held by PNB Equity Resource Corp Sdn Bhd (PERC), at a price of RM417.5mil, or RM29.80 apiece. PERC is the private equity investment arm of PNB.
Read more at https://www.thestar.com.my/business/business-news/2018/03/13/umw-proposes-rm1pt1bil-rights-issue-in-takeover-of-mbm-resources/#EjufpXSeDGWZX3ik.99
14/03/2018 05:29
Lau333 There is another options for MBMR shareholder: exchange to UMW share at 21 new UMW share for every 50 MBMR share. Could be a better choice as long as UMW share is staying above 6.09 (excluding brokerages fees, stamp duty and clearing fee)...

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5723093
14/03/2018 12:38
Hafid mbmr now is 2.44. the price on the way down. maybe the deal will not go through and will go back to 2.10
14/03/2018 16:00
Hafid May go to 3.01
17/03/2018 22:02
yongch Aiyoyo....bad news!!!the proposal failed n rejected by big bosses lo!!!tp1.90!!!back to lowest n lowest!!!!jialat lo those ikan bilis who wanted goreng surely all die die kao kao!!
26/03/2018 21:10
gsi723 MBMR major shareholder make a right decision. RM 3.00 only can consider...UMW, if no enough cash, don’t make inadequate offer and say its fair... trying to grab the big market share should always pay at a premium
27/03/2018 06:20
Hafid as expected
27/03/2018 08:15
dompeilee dompeilee dompeilee Bought some MBMR @ 2.05...Gonna b sizzling hot soon !:

16/10/2017 16:04

Another JACKPOT after KSSC !!!!!! SOLD 1/2 @ 2.48-2.50!!! :D
12/03/2018 09:18

Looks like I exited @ a good price...thanks, MBMR!!! :)
27/03/2018 14:37
gsi723 Personally I also won't sell. Don't mind if share price drop to 2.00.... It has done with impairment. Going to have better days ahead... No point sell cheap for another party to win at low cost..
27/03/2018 18:00
gsi723 If want to offer share, also 2:1... UMW very unsincere
27/03/2018 18:02
dompeilee UMW is a debt-ridden co. The "takeover" will fail.
27/03/2018 19:42
Hafid At least offer at nta or 3.38
01/04/2018 18:02
Hafid today umw say not extend the mgo to all
03/04/2018 15:01
gsi723 3.00 Boleh deal
03/04/2018 19:13
Hafid See can drop below 2.20
03/04/2018 22:01
apolloang if takeover cancel later macam iwcity,down like hell
03/04/2018 22:02
Hafid WILL NOT GO DOWN TO 2.00
04/04/2018 09:15
Hafid Med-Bumikar rejected the offer from UMW on the grounds that the offer price was too low. It does not take into account MBM Resources' other businesses ranging from distribution of Volvo cars, assembly and marketing of Hino trucks and property development. MBM Resources also has a stake in Rubberex Corp Bhd, a glove manufacturer.
04/04/2018 10:10
Hafid They are no pushovers. Mara or UMW will find it hard to force the deal
04/04/2018 10:11
gsi723 thanks to UMW, now people only know MBMR got values... UMW, no $ don't buy... if wanna buy, offer RM2.80- 3.00
04/04/2018 23:19
Lau333 UMW to sweeten the offer but higher offer price wasn't on the table.

https://www.thestar.com.my/business/business-news/2018/04/11/umw-goes-back-to-drawing-board/
11/04/2018 20:02
Hafid No hope have to wait until october
29/04/2018 00:42
Hafid Mara support the deal
01/05/2018 14:11
Hafid What next for.mbmr. wait.or buy umw
01/05/2018 14:13
gsi723 so, 2.50 will be the support level as the deal is going to happen, with possibility UMW slightly up the offer price..
01/05/2018 16:55
Hafid See can go up to RM2.80,3.20
01/05/2018 20:06
Hafid The board of MBM Resources Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png

(MBM) is expected to seek a higher price from UMW Corporation Bhd in the takeover offer for the former.

Sources said Med-Bumikar Mara Sdn Bhd, the major shareholders of MBM, is expected to communicate to the board of MBM to negotiate for a higher price than what is on the table at the moment.

On Monday, 52.06% of Med-Bumikar Mara shareholders voted in favour to accept the offer from UMW for its stake in MBM subject to certain requirements and conditions.

Medi-Bumikar Mara also recommended to the board of MBM to form a task force to negotiation with UMW, acting in the best interest of the company.


In March, UMW offered to buy Med-Bumikar Mara’s 50.07% in MBM at RM2.56 per share. Med-Bumikar Mara initially rejected the offer but the privately held company that is controlled by six families and MARA, agreed to the deal last Monday.

“One of the conditions for accepting the deal is for the board of MBM to negotiate for a higher price,” said a source.

Medi-Bumikar Mara’s representatives on the board of MBM is led by Datuk Abdul Rahim Abdul Halim, who is also the chairman of MBM.

Abdul Rahim is one of the persons responsible for the start of Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and is well aware of the legal issues should any one party want to take up a substantial stake in the automotive company.

It has been reported that MARA and two other families holding 52.06% interest collectively in Med-Bumikar Mara called for an extraordinary shareholders meeting of the privately held company to push through the acceptance to UMW’s offer.

A source said that on the face, the impression was the remaining shareholders in Med-Bumikar Mara are not keen on the offer from UMW.

“That perception is not true. The remaining shareholders who come from four families are keen on accepting the offer from UMW. The only problem is they want to secure a higher price before agreeing and putting it to the board of MBM,” said a source.

The jewel in MBM is its direct 20% stake in Perodua. It also has another 2.5% indirect stake through a joint venture with Daihatsu of Japan.

UMW has extended by six months the offer period, by which time it has to get the consent from Perodua’s Japanese partners.

Apart from a substantial interest in Perodua, MBM also holds dealership for Mitsubishi, Volkswagen, Volvo, Daihatsu vehicles. It assembles and distributes Hino trucks that is used for commercial purposes.


Read more at https://www.thestar.com.my/business/business-news/2018/05/03/mbm-resources-likely-to-seek-a-higher-price-from-umw/#72JVcawDEhYdi54D.99
07/05/2018 00:46
bachalet Hi Guys,

Pakatan promised to introduce fuel subsidies for cars below 1300cc (refer to page 30 under "Janji 7: Menyediakan subsidi minyak bersasar" of Buku Harapan ). I assume this will help increase sales for Perodua's Myvi as more people at least those in the below and mid income bracket would prefer to buy these types of car in order to get the fuel subsidies. This in turn will provide better growth for MBMR.

What do you guys think of this? Thanks.

Buku harapan link: https://www.keadilanrakyat.org/index.php/bukuharapan/
11/05/2018 11:13
ks5S Mbmr takeover by umw in a risk now after ph won.
Sell out before too late.
12/05/2018 10:18
Hafid See can drop to 2.20
12/05/2018 16:42
bachalet Hi Ks5S,

Don't think that the deal will be abandoned just because of a new government. The deal between UMW and MBMR has no political motives at all (at least in my view). The main reason for the acquisition is to have a bigger exposure in Perodua which will help grow UMW's bottom line in the future. Most analyst are actually bullish of this deal as it is seen as value accretive to UMW.

Daim has already met with Dato' Rahman (CEO of PNB) yesterday and it seems that the guy will stay on heading PNB in the near future.

http://www.theedgemarkets.com/article/daim-holds-maiden-meeting-heads-six-glics-today

Either way, Perodua sales is expected to grow this year which will be a boon for MBMR (lets see the 1st quarter result due end of this month). In addition, the potential reintroduction of fuel subsidy for cars under 1300cc might help push future sales of Myvi as more people would want to own this type of cars in order to gain benefit from the subsidies.

Feel free to comment.

Thanks.
14/05/2018 06:54
Hafid MBMR STart moving
14/05/2018 11:45
Hafid Tak ada gst sure kereta sales Naik lagi. ITU lah umw mahu ambilalih ITU syarikat.
14/05/2018 17:57


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