The Star reported today( 11/12/11) that it is all good for Proton Holdings Bhd as its share price put on 89 sen or 24.6% to close at RM4.50, amidst talk that its largest shareholder, Khazanah Nasional Bhd, is divesting its stake in the national carmaker. It was also reported that Khazanah was likely to ask for business proposals from parties interested in its 42.7% stake in Proton.
Last Friday, Proton's shares and warrants were also actively traded with the counter closing 51 sen higher than the previous day. Its share price has shot up by 66% over the past three weeks, reaching a intra-day high of RM4.60 yesterday with 20.16 million shares traded. This is due to the fact that Proton is looking into the possibility of a partnership with an established auto manufacturer with technological capabilities. With Khazanah's entry price of around RM8 and Proton's net tangible asset per share of RM7.62 as of end September, the offer price for Khazanah's 42.7% stake should very well be above the last closing price of RM3.61, which works out to be about RM2bil.
If VW could benefit from DRB-HICOM's acquisition; this would give the German marque exclusive access to Proton's Tanjung Malim plant, accelerating its current Asean manufacturing timeline of producing 50,000 units of VW by 2018. CIMB Research motor analyst Loke Wei Wern said that a restructuring could take place, which could ultimately lead to a strategic partnership between VW and Proton. If this is true, it would be a very positive development for Proton. DRB-HICOM closed 20 sen higher at RM2.20 with 31.754 million shares changing hands.
In 2006 and 2007, Khazanah was in talks with VW to acquire a stake in Proton but the negotiations broke down in 2007 after the Government called them off. Last year, VW expressed interest in re-negotiations with Proton for a potential strategic partnership to localise the production of VW cars, but the deal fell through. Instead, VW partnered with DRB-HICOM.