Thứ Hai, 16 tháng 1, 2012

DRB-Hicom picked to get Proton – what will happen next?

The chart above shows the share price movement for Proton Holdings Berhad for the past 3 months up to yesterday. It settled down at RM5.18 yesterday, and previously hit a high of RM5.53 on the 13th January 2012. If only we all knew what was going to happen back in late November last year eh? It would have been a nice windfall just in time for the Chinese New Year this month.

Khazanah Nasional’s statement yesterday said DRB-Hicom had been identified as the appropriate party to acquire KNB’s stake in Proton as it’s proposal had demonstrated the company’s extensive involvement in the automotive sector, its network of strategic partnerships both local and international, and an effective platform to enhance Proton’s sustainability and meet its long-term growth needs. It’s RM5.50 per share offer price was also acceptable to Khazanah.

DRB-Hicom’s stake in Proton will rise from zero now to approximately 42.74% after the transaction is done – a total of RM1,291,040,812 in cash will change hands, with probably even more to be paid out later when DRB-Hicom makes a mandatory general offer for all remaining Proton shares after the acquisition is done.

This is not the first asset that DRB-Hicom owner Tan Sri Syed Mokhtar Al-Bukhary has acquired from Khazanah. He also paid RM623 million in cash for Khazanah’s stake in Pos Malaysia via DRB-Hicom, and the turnaround is already underway, with DRB-Hicom saying they have identified 17 new businesses that it could tap into via Pos Malaysia.

If you know Tan Sri Syed Mokhtar Al-Bukhary’s style, he will most likely install his own general to head Proton. When he took over Pos Malaysia, he made Datuk Khalid Abdol Rahman the group CEO. Datuk Khalid was previously DRB-Hicom group director of corporate planning. Who will be Proton’s new chief, or will DRB-Hicom choose to retain Datuk Seri Syed Zainal? Dato’ Nik Hamdan? Or Dato’ Lukman Ibrahim, previously with Proton for 17 years, former Group CFO and current group COO of DRB-Hicom and a man whose been described as having a “warm smile that brightens people up”?

There are more questions of course. What are DRB-Hicom’s plans for Proton? These details are all in the proposal to Khazanah, not not available for public viewing. Will DRB-Hicom matchmake Proton and Volkswagen? If yes, how do they intend to do it? Who will they retain and who will go? What fresh blood will they bring in? And will DRB-Hicom continue to ask for special privileges from the government for Proton – if yes, for how long?

© 2012 Paul Tan's Automotive News. All Rights Reserved.

This story originally appeared on Paul Tan's Automotive News on Tue, 17 Jan 12 06:49:42 +0000.

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