Corporate  |  FEBRUARY 21, 2013 6:15AM

Splash ‘positive’ on S’gor offer but wants more details

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Selangor water concessionaire Syarikat Pengeluar Air Selangor Holdings Berhad (Splash) will meet with the state next week to get more details on the takeover offer made by the latter yesterday.

However, a Splash official who spoke under condition of anonymity said that the concessionaire is mostly “positive” on the offer, which analysts say will see the 40 percent Gamuda-owned company earn RM743 million cash.

“We are seeking more details on a clause pertaining to the payment of surplus book value of assets over liabilities,” he said.

khalid-ibrahim-and-selangor-water-concessionaire-companies-2.0The state is offering Splash RM1.83 bil to take over its water assets plus equity. Selangor Menteri Besar Abdul Khalid Ibrahim said this would mean a 12 percent return on equity per annum, double that currently enjoyed.

The state is offering a cumulative RM9.65 billion to concessionaires Splash, Konsortium Abass Sdn Bhd (Abass), Puncak Niaga Sdn Bhd and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas).

This is the state’s fourth and highest offer since 2009. Syabas is 70 percent-owned by Puncak Niaga Holdings Bhd.

‘All depends on Rozali’

Selangor Menteri Besar’s political secretary Faekah Husin said Splash is “very positive” on the offer while “Abass is basically with the state government”. The state owns 91 percent of Abass.

“It all depends on Rozali,” she said, referring to Puncak Niaga Holdings Bhd’s Umno-linked executive chairperson Rozali Ismail, who owns a 41.5 percent stake in Puncak Niaga.

Syabas distributes water while the other three concessionaires own water treatment plants.

Puncak Niaga in an announcement to Bursa Malaysia late yesterday said that full details of the offer will be announced after due deliberation with the board of directors.

The concessionaires must give their answers by March 6.

Clearer after polls

Analysts, however, said that an outcome of the long drawn out water battle is only likely to surface after general election, which pundits say could be called within weeks.

selangor-government-takeover-water-companies-3.0They say that a change of government in Pakatan Rakyat-held Selangor or a BN-held federal government could be a game-changer.

“I don’t see discussions going through before the general election, especially since there are other unresolved related issues like the Langat 2 water treatment plant, which the federal government is adamant on,” one analyst familiar with the issue said.

Splash, however, would emerge a winner if the deal goes through. CIMB Research says the offer is at a 16 percent premium to its discounted cash flow of RM1.6 billion.

Meanwhile, JP Morgan in a note earlier this month valued Splash at RM1.07 bil.

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