- Starbiz reported that the four water concessionaires are likely to receive the revised offer for their assets today. This follows a signing of memorandum of understanding (MoU) between the federal and state governments for the construction of the Langat 2 treatment plant yesterday.
- Selangor chief minister Tan Sri Khalid Ibrahim was quoted as saying in reports that the Kumpulan Darul Ehsan Bhd (KDEB) will pay RM9.65bil to the shareholders of the water concessionaires.
- There is no change to the amount compared to the previous offer made in November. However, details are scant at the moment.
- While he said that the federal government will inject an additional RM2bil to assist the state government in the “share takeover”, it is uncertain if this would be part of the RM9.65bil offer or as a top-up to sweeten the deal.
- As for Langat 2, the tender exercises are expected to be awarded soon following the signing of the MoU yesterday.
- As there are no changes to the price tag, we opined that the new offer would likely be similar to the previous one, unless there is a top-up by the federal government.
- However, any clarity of the valuation and methodology would only emerge when the water concessionaires receive the offer letters. Our check with water players yesterday reveal that they have yet to receive any letters from the governments in regards to the offer.
- Until the offer is made, we maintain our HOLD call on Puncak Niaga with a fair value of RM3.40/share, which is based on the last offer made in November. We deemed the stock to be fully valued if there are no changes to the offer.
Source: AmeSecurities
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