SP Setia; Hold; RM3.93
Price Target: RM4.50; SPSB MK

SP Setia has announced that they have received the offer document in respect of PNB's MGO for SPSB's shares and warrants at RM3.95 and 96sen respectively.

Key dates:
22 Feb: Receipt of offer document
5 Mar: Last day for Independent Advice Circular
14 Mar: Closing date of offer

The offer is expected to turn unconditional soon (minimum acceptance of 50%+1 share) as PNB and Tan Sri Liew collectively hold 48.7% currently. PNB intends to maintain SPSB's listing status.

We advise investors to NOT accept PNB's offer, given improved clarity on management continuity (Tan Sri Liew will remain fully in control for the next 3 years) and strong growth potential. SPSB is also on track to achieve its RM4b FY12 sales target (+21% yoy), with RM932m chalked so far for the first 3 months and a brimming launch pipeline. SPSB is still looking for more landbank (including government land redevelopment projects) - leveraging on its strong balance sheet (net cash) & backing from PNB.

Maintain Hold, and TP of RM4.50, based on 10% discount to RNAV of RM4.97.

Source: HwangDBS Research 23 Feb 2012