Major investment holding company Sime Darby Bhd dropped a bombshell today, setting the market abuzz. Reportedly, the global trading and logistics giant has paused all matters related to their stock market since this afternoon (24th August).
There’s plenty of reasons why a company would need to suspend their stock market. But for Sime Darby, it seems to be tentative good news. Apparently, Sime Darby Motors and Perodua will be undergoing a merge!
Earlier today, news agency Reuters revealed that Permodalan Nasional Bhd (PNB) is considering a potential merger with Sime Darby’s automotive subsidiary Sime Darby Motors and Perusahaan Otomobil Kedua Sdn Bhd (Perodua). According to their sources, said merge is predicted to form an automotive giant worth over RM10 billion.
The news seemed to have merit as around 2:30pm today, Sime Darby filed a request with Bursa Malaysia to suspend trading in their shares and structured warrants linked to their stock. Reuters claimed Sime Darby Bhd shares were up 0.5% before the trading halt.
It was later revealed that the company had entered a conditional sale and purchase agreement with PNB to acquire their 61.2% stake in UMW Holdings Bhd for RM5.00 per share or RM3.57 billion. Reportedly, Sime Darby will be following up on the agreement with a mandatory general offer for the remaining 38.8% stake not held by PNB, to delist UMW from Bursa Malaysia.
According to Sime Darby’s group CEO Datuk Jeffri Salim Davidson, the strategic move aims to “strengthen Sime Darby’s presence in the Malaysian automotive sector by adding two highly performing brands into (their) Malaysian portfolio – Toyota and Perodua“.
As some may know, UMW has a 51% stake in UMW Toyota Motor and 38% stake in Perodua. Additionally, PNB is the biggest shareholder in both Sime Darby Bhd and UMW. As such, some claim this is a consolidation move by the state investment firm.
The Malaysian-based company will reportedly be seeking shareholders’ consent in November, during an extraordinary general meeting (EGM). However, Sime Darby Bhd expects the acquisition of PNB’s UMW stake to be completed in the next three months, and complete the take over by the end of February 2024.
Sources: Reuters, New Straits Times, PaulTan.org, Malay Mail
