Issues in the PLUS Bidding

Presenna Nambiar of the online NST seems to be of the opinion that a likely stalemate awaits for PLUS and its 2 bidders, assuming no other parties is coming into the fray at the 11th hour.

So has concluded that the outcome that may not be entirely bad for UEM Group Bhd and the Employees Provident Fund as they still control the highway company.

Three out of four analysts believe that PLUS Expressways Bhd (5052) will remain status quo, with no new offer from its existing owners in sight and Jelas Ulung Sdn Bhd's bid once again put under scrutiny.

PLUS is expected to make an announcement on the bids it received, after the market closes today (10 January 2011).

It looks likely to only be a bidding duel between the two so far, despite rumours of a new bid by Asas Serba Sdn Bhd and another from Tan Sri Syed Mokhtar AlBukhary-controlled MMC Corp Bhd resurfacing.

UEM-EPF has offered to take over PLUS at RM4.60 per share that works out to RM23 billion, while Jelas Ulung offered RM26 billion or RM5.20 per share.

One analyst from ECM Libra, however, believes that it is still likely for UEM-EPF to come back with a revised offer in the ele-venth hour and therefore have its bid go through.

As at press time, however, no announcements to the effect were made to Bursa Malaysia.

With no revised offer from UEM-EPF and doubts on Jelas Ulung's financing capabilities raised, it looks likely that neither will be voted in by shareholders.

An article in Singapore Business Times, inspired by a blog, questioned Jelas Ulung's ability to gain regulatory approval for the foreign currency financing it needs, on concerns of its capability to service such a debt.

The depreciation of the ringgit appears to be at the crux of the argument, and whether Jelas Ulung would be able to cope with effects it would have on its ability to service the credit.

[To my mind,Jelas Ulung remains the underdog as it is an unknown quantity which could perhaps be antithetical to the government of the day. The UEM-EPF bid ,however, seems  more to be blessed by the government as it is still within the GLC clawhold and EPF, a perfunctory of the government.

So,when the day ends today, my reading is UEM-EPF will win because of more certainties as well as the likelihood of a revised bid.

Let us see.