MISC Rises as EPF Seeks Higher Buyout Offer: Kuala Lumpur Mover

MISC Bhd. (MISC), the world’s second- largest liquefied natural gas shipper, gained in Kuala Lumpur after its biggest minority shareholder said it wants Petroliam Nasional Bhd. to raise its buyout price.

The stock advanced as much as 2.1 percent to 5.39 ringgit, its steepest intraday increase since Feb. 4, with trading volume about five times its three-month daily average. The stock pared gains to close at 5.31 ringgit. The benchmark FTSE Bursa Malaysia KLCI Index (FBMKLCI) fell 0.1 percent.

Petroliam Nasional, Malaysia’s state-owned oil and gas group known as Petronas, should increase its 8.8 billion-ringgit ($2.8 billion), or 5.30 ringgit per share, general offer, Azlan Zainol, chief executive officer of Employees Provident Fund, said in an interview after the market closed on March 1. Petronas already owns 63 percent of MISC, while the nation’s biggest pension fund holds 9.6 percent of MISC, according to data compiled by Bloomberg.

“Investors are betting on Petronas offering a higher price, including EPF,” Vincent Khoo, Kuala Lumpur-based head of research at UOB-Kay Hian Holdings Ltd. (UOBK), wrote in an e-mail to Bloomberg News. “At the same time, it appears that Petronas is not willing to up the general offer price, so there will be a gridlock in the meantime.”

Minority shareholders Penang Development Corp. and Pacific Mutual Fund Bhd. earlier told Bloomberg News the bid is too low. Shareholders should reject it and “ask for more,” Ahmad Maghfur Usman, an analyst at RHB Capital Bhd. (RHBC), wrote in a report, raising his price estimate to 6.12 ringgit from 6.03 ringgit.

‘Sick’ Business

It’s “fine” if investors reject it, the Edge newspaper reported over the weekend, citing Petronas Chief Executive Officer Shamsul Azhar Abbas. MISC has a “sick” business and the takeover offer allows minority shareholders to exit at a premium, he was quoted as saying.

A buyout would provide Petronas with greater flexibility in deciding MISC’s strategic direction, the group said when making the offer. Azman Ibrahim, a spokesman for Petronas, declined to comment by phone today.

The Kuala Lumpur-based shipping group completed a rights issue at 7 ringgit per share in February 2010. The stock tumbled 25 percent in 12 months before the Jan. 31 buyout offer, as the company booked losses and exited the liner industry. It’s since rebounded 19 percent to trade above the offer price.

MISC shuttered its container-ship business last year to focus on LNG tankers after the cargo-box unit made $789 million of losses over three years due to global overcapacity and falling rates. Last month, it reported fourth-quarter net income of $231.9 million, recovering from a $571.6 million loss during the same period a year earlier.

To contact the reporter on this story: Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net

To contact the editors responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net; Darren Boey in Hong Kong at dboey@bloomberg.net

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