S P Setia under selling pressure

KUALA LUMPUR (June 27): S P Setia Bhd president and CEO Tan Sri Liew Kee Sin has for the first time exercised the put option granted to him by Permodalan Nasional Bhd (PNB), a move that sees him reduce his interest in the property development company.

According to filings, Liew on Monday transferred 45.19 million S P Setia shares, or a 2.35% stake, to PNB in exercising the put option extended to him under the management agreement dated Jan 20. The 2.35% block was worth RM178.53 million based on the transacted price of RM3.95 a piece.

The management agreement between Liew and PNB came about after the latter's aborted takeover of S P Setia that started in November last year.

The offer met with resistance from Liew and the management and both parties came to an agreement in January which resulted in some revisions such as Liew being included as part of the takeover offer.

Following Liew's exercising the option, he now holds a 5.88% stake in S P Setia while PNB and its unit trust funds under management collectively hold about 73.06%.

S P Setia shares on Tuesday fell seven sen or 1.81% to RM3.78 with 56,200 shares traded. This was S P Setia's steepest fall in almost a month.

Liew declined to comment on the matter when contacted.

When PNB unexpectedly launched its takeover of S P Setia last year, questions abound as to whether Liew would remain with the property developer. The initial offer was at RM3.90 per share,

After the resistance from the management, the offer was upped to RM3.95 in January. Liew and PNB also entered into a management agreement where he would remain at the helm of the company for a three-year period and there be no changes to the board during that time.

As part of the agreement, Liew was also granted the put option to sell his shares in S P Setia to PNB at RM3.95 each during the period.

Equities analysts have said previously that Liew's exiting S P Setia would be a catalyst for downgrading the property developer.

The 53-year-old former banker joined S P Setia as an executive director in 1996 and has been credited for growing S P Setia from a construction company to a major property developer.

This story appeared in The Edge Financial Daily on June 27, 2012.

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