DRB-HICOM to go private?

FIRST QUARTER TARGET: Tycoon Syed Mokhtar may make standalone offer, says source

(Business Times) - Tan Sri Syed Mokhtar AlBukhary may make a standalone offer to privatise DRB-HICOM Bhd, the country's biggest automotive company, people working on the plan said yesterday.

Business Times understands that the plan is being helmed by privately-held Meridian Solutions Sdn Bhd. Meridian is a unit controlled by Syed Mokhtar's top financial aide, Ooi Teik Huat.

The low-profile 53-year-old Ooi is one of the Syed Mokhtar's top backroom boys, who sits on the board of many companies in which the Kedah-born businessman has a controlling stake.

Ooi currently sits on the board of Malakoff and MMC Corp Bhd. It is further understood that Hong Leong Bank Bhd and Public Bank Bhd are the two top banks working with Ooi on the privatisation.

"Hong Leong and Public Bank will help provide the financing for the exercise. It is scheduled to take place in the first quarter of this year," said the source.

Business Times was also told that DRB-HICOM could be taken private for between RM3.50 and RM4 a share, and that the exercise will be solely driven by Syed Mokhtar, who controls some 55 per cent of the company.

Syed Mokhtar, 61, could fork out as much as RM7.73 billion to take DRB-HICOM private.

The exercise comes barely a year after he bought Proton Holdings Bhd at RM5.50 a share or 24 times estimated earnings.
At RM4 a share, DRB-HICOM is valued at RM7.73 billion.

The stock closed at RM2.63 a share yesterday, giving it a market capitalisation of RM5.08 billion.

"None of the other shareholders are involved. It is a standalone bid as DRB-HICOM is severely undervalued. Its landbank itself has a net worth of RM10 billion," said the source.

Neither Syed Mokthar nor his representatives on the board of DRB-HICOM have briefed the board on the planned exercise.

"When they are ready with the money and the numbers tally, they will file in straight the offer to take DRB-HICOM private to the company secretary," said the source.