Proton to be delisted
KUALA LUMPUR, April 24 — Tan Sri Syed Mokhtar Al-Bukhary’s DRB-Hicom will take Proton private after securing a 90 per cent interest through its takeover offer.
According to DRB-Hicom’s advisers Maybank and Hong Leong, the offer of RM5.50 for each of the remaining 274 million shares received acceptances worth a 40.01 per cent stake as of 5pm yesterday, bringing the conglomerate’s holdings to 90.02 per cent.
DRB-Hicom has said it will delist the national carmaker should it cross the 75 per cent threshold and yesterday extended the takeover offer from an earlier April 25 deadline to May 9.
According to the Edge Financial Daily, the offer price is higher than Proton’s trading price over the past four years but substantial lower than the period before that.
Taking Proton private will allow logistics tycoon Syed Mokhtar to merge its operations with the rest of DRB-Hicom’s automative business, which includes assembly for Honda, Suzuki and Mercedes, creating the single largest automotive group in the country.
But this will likely be a blow to its current network of parts vendors as the company also extensively manufactures automotive parts.
“The level of integration will definitely be much higher than say DRB-Hicom having a controlling stake in a listed Proton, which would still be answerable to minority shareholders,” the newspaper quoted an analyst as saying.
It also cited an industry observer as saying that an asset disposal is likely with DRB-Hicom now controlling three major assembly plants in Shah Alam, Tanjung Malim and Pekan, “each with underutilised capacity.”
It has been speculated that DRB-Hicom, which also has a property arm, will relocate Proton’s manufacturing operations to its Tanjung Malim plant in order for the prime tract of land in Shah Alam to be sold or redeveloped.
There have also been reports that global automotive giants Volkswagen and General Motors as well as Mitsubishi are eyeing the Tanjung Malim plant which has a capacity of 250,000 vehicles a year but can be expanded to quadruple that figure.
DRB-Hicom also said yesterday it has not decided on the fate of Proton’s loss-making British sportscar maker Lotus.
In the nine months ending December 31, 2011, Lotus’ operating losses jumped to RM166.6 million from RM102.4 million a year ago, where Proton incurred a net loss of RM68.09 million and a profit of RM90.5 million in the respective periods.