Tuesday February 15, 2011

Bidders for Khazanah’s stake in Pos Malaysia to go through rigorous process


PETALING JAYA: Khazanah Nasional Bhd will be putting the bidders for its 32.21% equity in Pos Malaysia Bhd through a vigorous process that includes a detailed assessment of the business plan and whether there will be a “cultural fit” between the new owners and the postal company.

Yesterday was the deadline for all bidders to submit their offer and sources close to the deal said the format required for the bids was broken up into a few parts.

One of them being the business plan, another the indicative offer price and a third being the background information on the bidder such as the name of shareholders (including the ultimate shareholders) and partners as well as financial information of all companies in the consortium.

“The offeror will first look at the business plan of the bidders together with the background information on them.

Khazanah requires a detailed assessment of the bidders’ business plan and whether the party taking over Pos Malaysia has the right model

Pricing is less of a focus at this point,” a source said, adding that Khazanah's interest was to ensure that the party taking over Pos had the right model in place.

“Of course price is important but that comes later,” the source said.

Once Khazanah vetted through all three aspects of the bids, including pricing, it was said to be also keen on ensuring that the bidder could work with the current management of Pos, the source added.

“It is likely that meetings will be held between the short-listed bidders and the management of Pos, with Khazanah sitting in,” an investment banker said.

The banker pointed out that the outcome of those meetings would have a bearing on the selection of the successful bidder for the stake.

The banker also said it was unclear how long this divestment process would take but added that the deal would likely be completed before the Invest Malaysia 2011 conference that was scheduled to begin on April 12 in Kuala Lumpur.

The 32.21% stake in Pos that is up for sale comes with management control of the company.

Khazanah had on Jan 18 announced the opening of bidding for its stake in Pos Malaysia through its adviser, CIMB Investment Bank Bhd.

But news of Khazanah's divestment of its stake in Pos had first surfaced in March last year at the sidelines of Invest Malaysia 2010 conference, where Prime Minister Datuk Seri Najib Tun Razak announced it.

It has been reported that one of the conditions for prospective bidders is that they must be 51% owned and led by a Malaysian company.

It has also been reported that the bidders include Tan Sri Syed Mokhtar Al-Bukhary, Sapura Group and Scomi Marine Bhd.

Khazanah managing director Tan Sri Azman Mokhtar told the media last month that the calling for bids for the Pos stake was part of the second stage of its divestment plan.

The first stage of the divestment plan was about ironing out regulatory issues such as the postage stamp hike and salary of postmen that were necessary to start the bidding process, he said.

“The next milestone would be the Postal Bill. Hopefully, it will go through in the next Dewan Rakyat sitting,” Azman was reported to have said.

Another issue with the Pos divestment has been the Government's golden share in the postal company, which gives it the right to override the board and management.

POS : [Stock Watch] [News]

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