Speculation that a proposed Rm15.6 billion takeover bid for PLUS parent UEM Group Bhd by MMC Corp has emerged in the public sphere, in what observers say could be a circuitous way of acquiring the toll road concessionaire.
Recent news reports say MMC Corp is proposing a special purpose vehicle with the EPF and PNB as partners to acquire UEM. It is said MMC plans to lead the consortium with a 40% stake, while the EPF and PNB will hold 30% each.
It remains unknown whether the EPF and PNB have been consulted on the issue or agree to the terms, although it is understood that a formal proposal was submitted to the Ministry of Finance in Aug 2010.
UEM Group Bhd however is unaware of any proposals by parties interested in acquiring its assets, said group managing director and chief executive officer Datuk Izzaddin Idris.
He said if there was such a proposal it would have to go through UEM's shareholders. He was responding to questions raised over rumours that MMC Corp Bhd had put in a RM15.6 billion bid to acquire UEM.
Industry observers say it is debatable that the government will agree to MMC controlling more of the Malaysian economy via UEM Group when it already has stakes in independent power producers, ports, airports and water concessionaires.
The fact that MMC’s balance sheet is stretched, with its net gearing standing at 1.6 times as at June 2010. This is set to rise following its commitment to raise funds for the RM14 billion tunneling portion of the much MRT job.
UEM Group is a unit owned by government investment arm Khazanah Nasional Bhd. It is trying to grow its businesses. Khazanah has not given any indication to UEM Group that it has received any proposals.
UEM Group will continue to grow its four core businesses after undertaking streamlining and divesting initiatives in the last six and eight months.
Group MD and CEO Datuk Izzadin Idris said four core businesses – expressways, townships and property development, engineering and construction as well as assets and facility management – were now considered the cherries of the group and were progressing well.
With regard to the sale of Time Engineering's 27.1% stake in TimeDotCom, UEM Group group managing director and chief executive officer Datuk Izzaddin Idris said "a few parties" had expressed interest, but that UEM was keen on growing the business before disposing its stake.
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