Late twists leave UEM-EPF sole bidders for PLUS

UEM-EPF is offering to buy PLUS for RM23 billion in cash. — file pic

KUALA LUMPUR, Jan 10 — UEM-EPF emerged as the only bidders for PLUS Expressways Berhad (PEB) this evening, after Jelas Ulung declined to put in the stipulated deposit and MMC’s reported bid failed to materialise by the offer deadline.

PEB today said it had received no new offers for the company upon expiry of the deadline.

It added that only UEM and EPF remitted the required RM50 million deposit and submitted a letter from their financiers regarding their financial ability to undertake and complete their proposed acquisition of PEB.

Earlier, Jelas Ulung chairman Tan Sri Ibrahim Zain said the company did not put down the deposit due to “uncertainties” surrounding an acquisition bid for the highway concessionaire but said its original RM26 billion offer remained valid.

“We decided not to put in a deposit but our original offer still stands,” Ibrahim told The Malaysian Insider. “If they decide to accept our offer, then we can talk.”

He said that some of the uncertainties that he perceived include whether the winning bidder would be determined based on “price or other factors”.

MMC, which was reported to be putting in a bid today, said in a stock exchange filing later that it had not received any indication from the government on its proposal to acquire PEB via the acquisition of its parent company, UEM Group.

Ibrahim had earlier said that the Bank of China through its subsidiary had agreed to loan Jelas Ulung RM33 billion to finance the PLUS acquisition.

The total cost of the acquisition was expected to be RM38 billion, consisting of the RM26 billion acquisition cost and RM12 billion of liabilities. The remaining RM5 billion was to have come from investment from unnamed equity partners.

Some concern was expressed in the media over the potentially huge foreign currency borrowings, which some feared could lead to a situation similar to the 1997 Asian Financial Crisis.

Ibrahim, however, dismissed the concerns and said they was based on inaccurate assumptions.

He added that Jelas Ulung expected to receive most of its funding in ringgit from local sources, with the foreign bank acting as a guarantor.

UEM and the EPF made a joint-offer to acquire PLUS and all its business undertakings, including all assets and liabilities, for RM23 billion in October.

The offer is conditional, however, on the successful restructuring of the concession agreement with the government.

The proposed acquisition, to be satisfied by cash, would be through a co-investment vehicle with UEM holding a 51 per cent stake and EPF, the rest.

UEM Group and its parent company, Khazanah Nasional Bhd, collectively hold 55.25 per cent of PLUS, while EPF has a 12.03 per cent stake. - Malaysian Insider