THE BUZZ

MISC announced yesterday that Petronas has received complete and valid acceptance from the Employees Provident Fund (EPF) for its buyout offer of MYR5.50 per MISC share. EPF holds approximately 424.2m shares in MISC, accounting for 9.5% of its paid up share capital.

OUR TAKE

PNB may follow suit. The remaining key minority shareholders who own a combined 10.2% of MISC have yet to accept the revised offer from Petronas at MYR5.50/share. With EPF now having taken the lead to accept the offer, we expect minorities to follow suit.

The second largest minority shareholder after EPF is Permodalan Nasional Bhd (PNB), which has 283m shares, or 6.3% of the company. According to Bursa filings, PNB last bought 52.8m MISC shares in the open market on 4 Jan, increasing its stake from 5.2% to 6.3%. PNB had been disposing of MISC shares prior to the latest purchase. Since the rights issue in 2010, PNB’s shareholding in MISC had been hovering at around 6% versus the 4% in 2008.

Accept the offer. We urge minority shareholders to accept the revised offer. The deadline for acceptance is 5pm on 19 April.

What’s next? We foresee a restructuring of the MISC group after it is taken private, which may potentially see its business entities carved out and listed separately. This may facilitate some fund-raising on the back of its improved valuations. We see such fund-raising mainly centred on expansion of the group’s fleet of liquid natural gas (LNG) vessels for the Gladstone and Progress Energy ventures. We do not rule out the potential entry of new shareholders, which are likely to be the partners in its new LNG ventures. Meanwhile, the group’s petroleum and chemical tanker division is likely to remain in private hands until it becomes profitable.

Source: RHB