KUALA LUMPUR: Dayang Enterprise Holdings Bhd could be moving forward with its plan to privatise Perdana Petroleum Bhd after upping its stake in the oil and gas (O&G) player recently to 29.88% from 28.62% on Nov 6, 2014, bringing it closer to the mandatory general offer (MGO) threshold of 33.3% 

In a Bursa Malaysia filing yesterday, Perdana Petroleum (fundamental: 1.3; valuation: 1.8) said Dayang (fundamental: 2.3; valuation: 2.1) acquired 11.5 million of its shares in the open market from March 16 to 18. 

The price of the additional stake purchase was not disclosed. The Edge weekly wrote late last year that as the single largest shareholder of Perdana Petroleum, it makes sense for Dayang to increase its stake to gain better control of its assets. Dayang charters vessels from Perdana Petroleum to execute its contracts.  

Speculation was that Dayang was eyeing Lembaga Tabung Haji’s (LTH) direct and indirect stakes of 8.43%, as Perdana Petroleum was expected to be dropped from the Securities Commission Malaysia’s (SC) syariah-compliant list, meaning the pilgrim fund would then have six months to sell its portion. 

Perdana Petroleum was dropped from the SC’s syariah-compliant securities list that was published on Nov 28, 2014. 

This means that LTH has approximately two more months to sell its stake in the O&G player. If Dayang acquires LTH’s stake, the move would effectively trigger a MGO, which would then require Dayang to make an offer for the remaining shares it does not own in Perdana Petroleum.  Market observers do not discount a takeover attempt by Dayang, as it has been steadily accumulating shares in Perdana Petroleum since it first emerged as a substantial shareholder in December 2011 with 57.1 million shares or a 11.53% equity interest. 

Dayang’s initial intention of acquiring the stake was to diversify its business and also to mitigate the potential shortfall of vessels in the industry.

This article first appeared in The Edge Financial Daily, on March 24, 2015.