KUALA LUMPUR (March 21): Kumpulan Perangsang Selangor Bhd (KPS) gained as much as 21% on the likelihood of a takeover offer from the Selangor Government for water concessionaire Syarikat Pengeluar Air Selangor Holdings Bhd (Splash).

KPS owns a 30% stake in Splash via 100%-owned unit Viable Chip (M) Sdn Bhd. The takeover speculation followed a report by The Edge Financial Daily (Edge FD) last Thursday (March 16) that a high-level meeting between Federal and Selangor Government officials was scheduled last Friday (March 17).

Edge FD, quoting industry sources, reported that the meeting was crucial as it could bring an end to the long-standing impasse in Malaysia's water sector.

"Splash was valued by RHB, which was commissioned by the state in 2015, to be worth anywhere between RM2.8 billion and RM3.2 billion, while a valuation done by Deloitte after being tasked by the Federal Government last year, was rumoured to be in the region of RM3 billion, but the real figure was never revealed to the public," Edge FD reported.

Today, KPS shares rose to their highest at RM1.63. At 12:30pm, the stock settled at RM1.57 for a market capitalisation of RM763.48 million. KPS was Bursa Malaysia's fifth-largest gainer.

Splash's other shareholders are Gamuda Bhd and Sweetwater SPV Sdn Bhd, which own 40% and 30% stakes respectively.

On KPS's share trade today, SJ Securities Sdn Bhd remisier Goh Kay Chong said institutional buyers made up 78% of the stock's purchases today.

"The counter is trading above its 360-day moving average line, meaning the long-term players are back to the counter to give the counter the necessary support when there is profit-taking," Goh told theedgemarkets.com.