PETALING JAYA: The two deals that would have seen UMW Holdings Bhd increase its ownership of Perusahaan Otomobil Kedua Sdn Bhd (Perodua) to 70.6% have collapsed.
The offer period for the deals, involving the potential takeover of MBM Resources Bhd and the acquisition of a 10% stake in Perodua owned by Permodalan Nasional Bhd (PNB), ended yesterday.
In a statement, UMW said it had decided to allow the offers to lapse, and that it would not further extend the offers.
“Given the current business environment, we have recalibrated our corporate strategy in line with our ongoing transformation efforts and will focus on improving our financial performance,” it said.
“We believe this will further strengthen our overall financial position, which will enable us to remain resilient in the increasingly challenging business environment,” said its president and group CEO Badrul Feisal Abdul Rahim.
UMW’s bid to strengthen its position in the domestic automotive market began on March 9 this year, when it made an offer to Med-Bumikar Mara Sdn Bhd to acquire its controlling 50.07% stake in MBM for RM501mil, or RM2.56 per share.
MBM owns a direct 20% stake in Perodua and an indirect interest of 2.5% through a joint venture with Japan’s Daihatsu.
Apart from its substantial interest in Perodua, MBM also holds dealerships for Mitsubishi, Volkswagen, Volvo and Daihatsu vehicles. It also assembles and distributes Hino trucks used for commercial purposes. At the same time, UMW made an offer to buy PNB’s 10% interest in Perodua at a price tag of RM417.5mil. At the moment, UMW, which has been the single-largest shareholder in the carmaker since 1993, owns 38% of Perodua.
Later, on March 26, UMW announced that MBM had rejected its offer. The deadline was then extended by another six months to Oct 31, 2018 for the MBM as well as PNB deal. Since the extension was announced, major changes have taken place in the country’s political landscape, which led to changes in the top leadership of many government-linked companies (GLCs), including PNB and Mara. A source told StarBiz that these changes also meant the priorities and direction of these institutions had shifted.
“There is also the possibility of a third national car, which could result in significant changes in the automotive sector,” he said.
Another industry source said PNB chairman Tan Sri Zeti Akhtar Aziz, who replaced Tan Sri Abdul Wahid Omar who retired from the post on June 30, had different priorities for the group. Talks on the deal had been initiated when PNB was under Abdul Wahid’s leadership. “The government is also looking at the role of GLCs and concerns that they are crowding out the private sector,” he said.
He added that there were also issues with Perodua’s technical partners, which were said to be not in favour of the deal.
Previously, there had been reports that Daihatsu, which has a 30% stake in Perodua, had opposed UMW’s plans to raise its stake in the carmaker, and had threatened to review its technological sharing with the company.
