This article first appeared in The Edge Financial Daily on May 25, 2018

KUALA LUMPUR: Diversified conglomerate UMW Holdings Bhd said it has been engaging with Perusahaan Otomobil Kedua Sdn Bhd’s (Perodua) technological partner and shareholder Daihatsu Motor Co in its pursuit to become the largest shareholder of the local automaker.

“We have been engaging with them,” UMW group president and group chief executive officer Badrul Feisal Abdul Rahim told a press conference after the company’s annual general meeting yesterday, but declined to comment on behalf of Daihatsu.

“I think we have explained to them in terms of [our] objectives or intentions,” said Badrul Feisal, “I think we are good for that and let’s hear their decision.”

Last week, The Edge Malaysia weekly reported that Daihatsu, which holds an about 30% stake in Perodua, had opposed the move by UMW and threatened to review its technology sharing agreement with Perodua.

Yesterday, Badrul Feisal declined to comment on this matter but said he sees Daihatsu as a long-term partner for Perodua going forward.

“They have always been our treasured technical partner [for Perodua], we will always want them, nothing [has] changed,” he added.

On March 10, UMW offered to buy all the ordinary shares in MBM Resources Bhd (MBMR) held by Med-Bumikar Mara Sdn Bhd and Central Shore Sdn Bhd, a wholly-owned subsidiary of Med-Bumikar, collectively representing 50.07% interest in MBMR for RM501 million, or RM2.56 apiece.

This would trigger a mandatory offer for the rest of the shares in MBMR, which has a 22.58% stake in Perodua.

UMW’s second offer is for a 10% stake in Perodua from Permodalan Nasional Bhd for RM417.5 million in a cash-and-new-shares deal.

These would result in UMW having a 70.6% interest in Perodua.

In April, UMW extended its takeover offer period for MBMR by six months until the end of October 2018 after the first extension lapsed.

On top of that, UMW also said the group did not intend to raise the offer price for MBMR.

When asked about the outlook for the year, the group said the worst is over after the disposal of its investment in the oil and gas sector, and believes it will return to the black this year.

However, Badrul Feisal said it is going to take some time to bring the group back to peak period, adding that its key contributor from automotive segment is still facing challenges by the intense competition from players in the market.

UWM posted a record net profit of RM951.04 million for its financial year 2012, but since then its results have been declining and slipped into the red in FY15, FY16 and FY17 consecutively.