|Sime Shareholders Yes To RM32 Bln Merger
KUALA LUMPUR, Aug 17 (Bernama) -- Sime Darby Bhd shareholders have voted in favour of the RM32 billion merger offered by Synergy Drive Bhd as per the recommendations made by the board of directors, says Sime's group chief executive Datuk Seri Ahmad Zubir Murshid today.
"The strong shareholder support shows their confidence going forward," he said after the company's extraordinary meeting here to seek stakeholders' approval for the merger -- which is expected to be completed in the fourth quarter this year.
The conglomerate, as well as the other seven companies, would be delisted by end-October while Synergy Drive would be listed on the Main Board of Bursa Malaysia, with Permodalan Nasional Bhd and Employees Provident Fund becoming the major shareholders.
The listing of Synergy Drive would see it potentially emerge as the third largest company on the bourse with the proforma combined market capitalisation of RM42.1 billion, based on the market price of the companies as at Aug 16, 2007.
The market cap shows an increase of 30 percent from RM31 billion at the time of the announcement of the merger made in November last year.
The other seven companies are Golden Hope Plantations Bhd, Guthrie Ropel Bhd, Highlands & Lowlands Bhd, Kumpulan Guthrie Bhd, Mentakab Rubber Co (Malaya) Bhd, Sime Engineering Services Bhd and Sime UEP Properties Bhd.
Commenting on the current weak share market which has affected Sime's stock price, Ahmad Zubir said it was still above the merger offer price of RM6.46 apiece.
"I think looking forward there is significant value in Sime," he said.
He noted that "if the market price goes down below the offer price, stakeholders should obviously take the offer."
Sime ended the session today at RM8.60.
Ahmad Zubir said Synergy Drive would not be created as a pure plantation company.
"As you know plantation is a commodity market but what we intend to set up is a good and strong conglomerate that can counter-balance the other areas that we are in," he said.
He said for the next couple of years, Synergy Drive would focus on the synergy of plantation and property areas.
"After two to three years, we will review the position. Currently, all the five businesses are performing well," he said.
Synergy Drive is expected to have a combined workforce of about 107,000 and five core businesses in plantations, property, heavy equipment, motor vehicles and energy and utilities.
On whether Synergy Drive would undertake retrenchment post-merger, Ahmad Zubir said "although the workforce is huge, I don't think we are having any problem with it going forward."
"But in the near future, we would like to mechanise our operations," he said.
He said crude palm oil prices would remain strong towards year-end.
"CPO prices are strong at the moment. Though the market is trending down, to me anything above RM2,000 per tonne, is still strong," he said.
On the physical market, August South prices increased RM15 to 2,480 per tonne from RM2,465 quoted yesterday.