Thursday May 22, 2008
The Star Online 

Sindora shares surge to RM2.20 after snag in Kulim bid
By JOSEPH CHIN


PETALING JAYA: Sindora Bhd’s share price surged to almost an 8½-year high of RM2.20 yesterday after Kulim (Malaysia) Bhd’s offer to acquire the remaining 27.81 million shares, or 28.96%, hit a snag.

A factor for the strong interest in the stock was that Sindora’s adjusted net asset per share would be RM2.72 based on the market value of its plantation assets of RM201mil. Kulim had offered RM1.72 per Sindora share.

Analysts said there were expectations that Kulim might raise the offer price.

Sindora closed 14 sen higher at RM2.20 on volume of 850,400 shares yesterday. Kulim’s share price rose 30 sen, or nearly 3.6%, to a three-month high of RM8.70 while its warrants rose 35 sen, or almost 6%, to RM6.25.

Affin Investment Bank, the independent adviser for Sindora shareholders, had last Friday advised the latter to reject Kulim’s offer as the Sindora’s net assets did not capture any enhancement from a revaluation of its plantation assets.

OSK Investment Research said yesterday Kulim’s acquisition of the 62% stake in Sindora from parent company Johor Corp at RM1.72 was completed on April 25.

“Even if Kulim does not secure the remaining shares in Sindora, it is already firmly in control and does not need to buy the remaining shares,” the brokerage said.

OSK Research said Kulim intended to maintain the listing status of Sindora and hence it was unlikely to raise the offer price for Sindora.

“Moreover, we think it is difficult for Sindora to trade up to nine times price-to-earnings (PE) given that there are so many small plantation companies the size of Sindora which are trading at just five to six times PE,” it added.