RANHILL Bhd is close to being taken private by controlling shareholder Tan Sri Hamdan Mohamad in a deal that can be worth about RM420 million, says a source.
The source told Business Times that Hamdan, who controls the engineering firm and is also the group's president and chief executive officer, is working out the details to take it private within the next three to four months.
Hamdan and Ranhill executive director Datuk Chandrasekar Suppiah could not be reached for comment.
Analysts said the controlling shareholders of Ranhill had toyed with the idea to take it private as the stock has relatively underperformed.
Ranhill shares have dipped by some 70 per cent this year trading as low as 79 sen in the last few weeks from a RM2.65 high in January.
Yesterday, the stock closed five sen higher than the previous day's closing of 91.5 sen, with 77.7 million traded shares.
"Even if we assume there is no value attached to its construction and EPCC business and only assigned value to its 100 per cent stakes in Ranhill Utilities Bhd (RUB) and Ranhill Power Bhd (RPB) based on their respective privatisation valuations of RM1.1 billion and RM258 million respectively, coupled with debts of about RM100 million at holding company level, Ranhill's theoretical sum or parts fair value works out to about RM1.98 apiece," the analysts said.
"This is very close to its net tangible asset of RM1.91 a share as at March 31 2008," they added.
For the 12-month period to June 2007, Ranhill posted a profit of RM117 million and revenue of RM1.47 billion.
Last September, Ranhill announced plans to take its power arm, Ranhill Power Bhd (RPB, private by buying the rest of its shares for RM35.4 million, or RM2.15 apiece, and consolidating the power company under the group to maximise returns.
Business Times reported in January that Hamdan was mulling to take Ranhill and RUB private and re-list the shares in London, Dubai or India to command a higher valuation.
Ranhill responded saying that they would always seek proposals to improve shareholder value.
Five months later on June 6, Ranhill announced to Bursa Malaysia that Hamdan was taking RUB private under a RM305.11 million takeover offer.
Hamdan and partner Ahmad Zahdi Jamil are offering RM3.50 each for the remaining 87.17 million shares, or a 29.60 per cent stake, in RUB.
The offer price represents a 38 sen premium to RUB's share price of RM3.12 at the time the announcement was made.
Source : Business Times