Following the meeting and joint statement, we believe that the odds of our worst-case scenario (see SP Setia note dated 29 June for details) materialising are falling. But there is no guarantee that our best-case scenario will pan out either. There are two likely outcomes 1) Tan Sri Liew stays on as CEO and does not sell any shares and 2) he stays on but sells part or his entire 11.3% stake. The first outcome is similar to our best-case scenario as it would be close to status quo and SP Setia as a subsidiary of PNB could benefit from joint ventures or landbank injection by its parent. The second outcome could be a cause for concern for investors as few would hang on to the shares of a company when the key driver and substantial shareholder chose not to do so. We expect greater clarity in the next few weeks as presumably, PNB and SP Setia will sit down and resolve any outstanding issues. Also, the independent advice circular should be out on 18 Oct while the offer document from PNB should be released the following day.
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