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DRB-Hicom Stock Jumps on Report Mokhtar May Offer Buyout

Jan. 10 (Bloomberg) -- DRB-Hicom Bhd., a Malaysian automaker, rose the most in two weeks in Kuala Lumpur trading after news reports said its biggest shareholder Syed Mokhtar Al-Bukhary may buy out the company and list its distribution arm.

The stock climbed 2.7 percent to 2.70 ringgit, its steepest increase since Dec. 28. It’s the biggest gainer in the FTSE Bursa Malaysia Top 100 Index, which fell 0.3 percent. The shares earlier gained as much as 5.7 percent.

Billionaire Syed Mokhtar may make a standalone offer to take DRB private at 3.50 ringgit to 4 ringgit per share, Business Times reported today, citing unidentified people working on the plan. The group, which acquired national carmaker Proton Holdings Bhd. last year, may also list its distribution arm, state news agency Bernama reported yesterday.

“We believe any privatization would make sense,” Lucius Chong, an analyst at CIMB Group Holdings Bhd., wrote in a report today. “DRB is trading below its net tangible assets and a restructuring could be accelerated through the sale of non-core assets and the separate re-listing of its automotive businesses,” he said.

DRB, based in Shah Alam, Selangor, also has property development and construction businesses, according to its website. Syed Mokhtar, 61, owns 56 percent of the company through Etika Strategi Sdn., data compiled by Bloomberg show. He is Malaysia’s seventh richest man with assets totaling $3.3 billion, according to a Forbes magazine ranking in March.

“We are unaware, caught by surprise, and there hasn’t been any proposal that came to DRB,” Group Managing Director Mohd Khamil Jamil told reporters in Kuala Lumpur. “You put it rightly that it’s a rumor. Don’t believe the rumor.”

Last month, companies linked to Syed Mokhtar made a takeover offer for Tradewinds (Malaysia) Bhd., a palm oil planter and rice producer.

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

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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