EPF offer for MRCB fair, says CIMB Research

KUALA LUMPUR: CIMB Equities Research says the Employees Provident Fund Board’s conditional takeover offer for Malaysian Resources Corp Bhd at RM1.50 per share as fair price, although it is a 10% discount to its target price of RM1.66.

The research house said on Thursday, March 4 that MRCB has been trading at around RM1.40 for the past few weeks. Although EPF is not offering a hefty share price premium, it said some shareholders will take up the offer, it said.

On Wednesday, the EPF extended a conditional general offer (GO) of RM1.50 cash per share for the 66.2% of MRCB that it does not own post rights.

“The offer price is 10% lower than our target price of RM1.66 but would look reasonable to investors looking to take profit as the share price has been hovering around RM1.40 for the past few weeks.

“We retain our forecasts, NEUTRAL call and RNAV-based target price of RM1.66, which is pegged to an unchanged 30% RNAV discount. The key developments we expect for 2010 are the potential land acquisitions and contract awards,” it said.

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