MRCB deal with IJM Land is off
Posted on | December 31, 2010
By BUSINESS TIMES
Malaysian Resources Corp Bhd (MRCB) may look for a new takeover target after its planned deal with IJM Land Bhd was scrapped.
The two property groups were supposed to announce a definitive agreement yesterday after signing an initial pact for a proposed merger about a month ago.
Analysts were surprised the deal, said to be driven by its common major shareholder the Employees Provident Fund (EPF), failed.
“No one saw this coming. I am disappointed that the deal didn’t go through,” said CLSA Securities Malaysia Bhd analyst Clare Chin in a telephone interview.
“If the merger had gone through it would have meant a larger player in the property development sector in the greater KL area,” added Chin.
Both MRCB (1651) and IJM Land told Bursa Malaysia yesterday that they could not reach an agreement on the definitive terms of the proposed merger.
Investors didn’t take the news well. IJM Land shares lost 12 per cent, or 38 sen, to close at RM2.86 while MRCB eased 3 per cent, or six sen, to RM1.99.
Analysts had said that the main reason behind the proposed merger was the development of the Rubber Research Institute land in Sungai Buloh.
The land, which is 3,300-acre wide, belongs to MRCB parent EPF, which was given the mandate by the government in March to develop the area into a township next year.
However, MRCB is good in building commercial properties and lacks the expertise in developing townships, something that IJM Land has.
Chin said it was possible that MRCB may be looking for another suitable candidate to merge.
IJM Land chairman Datuk Krishnan Tan, in a telephone interview with Bloomberg News, said that he was “disappointed” over the failed deal with MRCB.
Tan said IJM wasn’t talking with anyone else at the moment although it would not rule out another partner. He also declined to give details for abandoning the proposal.
- MRCB IJM Merger Off
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