Tenaga upped its offer for the acquisition of port operator Integrax Bhd by 50 sen to RM3.25 yesterday, bowing to pressure from Perak Corp Bhd, which had earlier rejected Tenaga’s original RM2.75 offer unless it is raised to RM3.25. With yesterday’s revised offer, Perak Corp is set to accept TNB’s takeover bid for Integrax, leaving its deputy chairman, Amin Halim Rasip, as the only other substantial shareholder who has yet to accept the offer as he had said the real value of Integrax should be more than RM5. Amin holds a total 23.78% direct and indirect stakes in Integrax. (Source: Financial Daily)

Comments:  We believe TNB would unlikely raise its offer price for Integrax beyond RM3.25, as TNB would emerge as the largest shareholder with a 38%  stake  in  Integrax  and  therefore  will  have  tighter  control  over  the company in comparison to Amin’s 23.78% stake. We expect Perak Corp to accept  the  revised  offer  of  RM3.25,  given  that  this  is  the  price  they  had earlier  said  this  week  which  would  nudge  them  to  give  up  their  15.74% stake in Integrax. We maintain our Buy rating on  Tenaga with unchanged TP of RM17.50.

Source: Affin Hwang Capital Research - 26 Feb 2015