Hyundai-Berjaya At 5-Month High

Hyundai-Berjaya Corporation Bhd rose as much as 17% to a five-month high of RM3.84 April 5 after Sime Darby Bhd's proposal to buy a strategic stake in the motor-based company.

The counter closed 42 sen higher at RM3.70, with 6.23 million shares done. Its warrants jumped 40 sen to close at RM2.90, but off its intra-day high of RM3, with 317,300 units traded.

Berjaya Group Bhd (BGroup) shares added 1.5 sen to 15 sen with 12.08 million shares done. However, Sime Darby shed 10 sen to RM5.80.

Sime Darby has proposed to buy a 51% stake comprising 92.21 million shares and 34.58 million warrants in Hyundai-Berjaya for a total of RM488.70 million or at RM4.10 per share and RM3.20 per warrant.

It is also proposing to buy 3.06 million shares in Hyumal Motors for RM76.50 million at RM25 per share and 51 million shares in Inokom for RM76.50 million at RM1.50 per share.

BGroup holds a 40.30% stake comprising 72.87 million shares and a 47.73% stake comprising 32.37 million warrants in Hyundai-Berjaya.

Analysts said since Sime Darby was expected to offer a mandatory offer for the remaining 49% stake in Hyundai-Berjaya, it would cost the conglomerate a total RM960 million for the entire stake in Hyundai-Berjaya.

The total acquisition cost would rise to as much as RM1.11 billion when the 51% stake each in Inokom and Hyumal Motor are included.

A local research house said based on consensus net profit of RM88 million for the financial year ending April 30, 2005 for Hyundai-Berjaya, Sime Darby was buying Hyundai Berajaya at a price-to-earnings ratio of 10.9 times.

It said the acquisitions should enhance Sime Darby net earnings by at least RM55 million from the year ending June 2005 onwards, less financing costs. It expected the purchases to boost its earnings per share by 2.4 sen to 40.2 sen.