KUALA LUMPUR (March 9): UMW Holdings Bhd is planning to amass a controlling stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua) in an exercise that would involve taking MBM Resources Bhd (MBMR) private.

In a filing today, UMW said it plans to acquire the entire 50.07% stake in MBMR held by Med-Bumikar Mara Sdn Bhd (49.5%) and Central Shore Sdn Bhd (0.57%) for RM501.04 million cash or RM2.56 per share, following which it would undertake a mandatory takeover offer (MO) for the remaining MBMR shares.

MBMR holds an effective 22.58% stake in Perodua.

At RM2.56 per share, the deal values MBMR at RM1 billion. The offer price represents a 13.3% premium over MBMR shares' volume-weighted average market price (VWAMP) of RM2.26 for the five-day period ended March 5, 2018.

Concurrently, UMW also plans to acquire another 10% of Perodua from PNB Equity Resources Corp Sdn Bhd (PERC).

UMW currently owns 38% of Perodua via UMW Corp Sdn Bhd, and should its proposed acquisition of the 50.07% stake in MBMR and mandatory offer succeed, its stake in the country's most popular car company would increase to 60.6%. It would further enlarge to 70.6% if the PERC stake, valued at RM417.5 million or RM29.80 per share, is also sealed.

The PERC offer values Perodua at RM4.18 billion and UMW said it planned to settle the 10% acquisition via RM117.5 million cash and the issuance of 49.26 million new UMW shares at RM6.09 apiece.

In a filing to the exchange, its investment bank Maybank IB stressed that "there is no certainty that the MBMR offer and Perodua offer would lead to any conclusive definitive understanding between the parties".

Also, UMW's offers to acquire the 50.07% and 10% stakes are conditional on the fulfilment of certain conditions, although both acquisitions are not conditional upon each other.

"There is therefore no certainty" that UMW will extend the proposed MO for the remaining MBMR shares, Maybank IB said.

The offer for acceptances for both proposals closes on March 28.

UMW said in addition to strengthening its exposure in the Perodua marque, the company would also increase its exposure in the commercial vehicle segment via MBMR's multi-brand dealerships such as Daihatsu and Hino vehicles.

"MBMR's auto parts manufacturing business, namely its wheels manufacturing, safety products and noise, vibration and harshness products will also widen UMW's offerings in the manufacturing segment," it added.

Shares of UMW rose 5 sen or 0.85% to close at RM5.95, giving it a market capitalisation of RM6.95 billion. MBMR shares slid 2 sen or 0.9% to settle at RM2.20, for a market capitalisation of RM859.95 million.