Thursday, May 07, 2009

UMW Going For Ramunia Against Sime Darby



Sime Darby will be acquiring Ramunia for RM232m - RM46.2m in cash and the balance in new shares of Sime Darby Engineering. This basically values Ramunia shares at just RM0.35. I would not touch Ramunia shares above RM0.55, you have been warned. The deal will make Sime Darby Engineering the largest fabricator in the country. It will almost double its capacity to 107,000 tonnes, and its yard capacity will be increased from 114 acres to 284 acres. Ramunia on its own is a dying company, but its assets are interesting to a larger and more professionally managed firm. Sime Darby Engineering should be able to increase its book orders almost instantly. Impact positive for Sime Darby but it will be marginal owing to Sime Darby's size. Chance to exit Ramunia with some decent pricing, not to trade or buy and hold.

However UMW has hinted that it might make a competing bid, hence the interest has pushed Ramunia shares to nearly RM0.70. Considering the overall situation, I can only see bidding topping out at RM0.50-0.52. Hence anything above RM0.55 for Ramunia is plain silly. UMW has no problem going for Ramunia as it has a cash hoard of RM1.5bn. If UMW looks likely to be successful, then the upside will be better.

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STOP PRESS!!!

UMW has since issued a statement to deny this.

Subject : ARTICLE ENTITLED “UMW SET TO CHALLENGE SIME DARBY FOR RAMUNIA”

Announcement Details :


We refer to the above article appearing in The Malaysian Reserve on Wednesday, 6th May 2009, captioned as above, on pages 1 and 4, in particular paragraphs 1 and 3 as follows -

Paragraph 1
“UMW Holdings Bhd will be putting in a bid to acquire Ramunia Holdings Bhd to strengthen its oil and gas business, according to sources.”

Paragraph 3
““Previously, Ramunia was in discussions with UMW but the talks went cold. Now UMW is interested again and they will be submitting their offer in the next few days,” said the source.”

In response to the article, UMW wishes to state that the Company does not intend to submit any bid for the acquisition of Ramunia Holdings Berhad and has no knowledge of the talks referred to above. UMW also confirms that it is not in any form of discussion with any parties in this regard.



This announcement is dated 6th May 2009.


cc - Securities Commission
(Issues & Investment Division)
-------------------------------


p/s photos: Pevita Pearce


6 comments:

Edwin said...

UMW has since issued a statement to deny this.

Subject : ARTICLE ENTITLED “UMW SET TO CHALLENGE SIME DARBY FOR RAMUNIA”

Announcement Details :


We refer to the above article appearing in The Malaysian Reserve on Wednesday, 6th May 2009, captioned as above, on pages 1 and 4, in particular paragraphs 1 and 3 as follows -

Paragraph 1
“UMW Holdings Bhd will be putting in a bid to acquire Ramunia Holdings Bhd to strengthen its oil and gas business, according to sources.”

Paragraph 3
““Previously, Ramunia was in discussions with UMW but the talks went cold. Now UMW is interested again and they will be submitting their offer in the next few days,” said the source.”

In response to the article, UMW wishes to state that the Company does not intend to submit any bid for the acquisition of Ramunia Holdings Berhad and has no knowledge of the talks referred to above. UMW also confirms that it is not in any form of discussion with any parties in this regard.



This announcement is dated 6th May 2009.


cc - Securities Commission
(Issues & Investment Division)

solomon said...

If my sources are correct, Ramunia will reject the deal today. This will mytisfy this deal as to who will emerge as the eventual buyer.

Yesterday, I came across hedge fund in one of the shareholding announcement. To you, whether the presence of hedge fund in a company is good or bad?

Salvatore_Dali said...

solomon,

i did say in the cpcb chatbox that the bid was too low n cheap for Sime Darby. Somebody should come in n big against them. Hedge fund or not will be ok, but hedge fund will probably be lining up a new buyer soon as they probably have no expertise or mgmt depth to turnaround Ramunia.

ccdev said...

sime has always been cheap bastards, they'll offer 5c above market price for some takeover. if ramunia is going to sell the crown jewel in their assets, better be for a pretty good premium.

maun said...

This is win-win situation for Ramunia and Sime. Ramunia is almost a dying company with no good cable to secure a project. Injected by Sime will survive Ramunia and increase its stock value either backdoor listing of SDE materialised or not. Only by the name of Ramunia, the actual player behind this company now are Sime and SDE.

Ivan said...

Hi Dali & All,

Any idea now for Ramunia share? Thought something may be happening early of April & yet, don't forget Tabung Haji holding around 30% of shares in Ramunia (whereby they enter around RM1 in year 2008). 130s