Who would be the winner of POS Malaysia?

It's been awhile since the government announcing its intention to divest its shareholding in Pos Malaysia last year. Through Khazanah Holdings, the government owned 32% stake in Pos. Let's re-look at the news with updated info, and hopefully we can have a better prediction on Pos in the near term.

While waiting for a new strategic partner, Pos has declared a one-off final and special dividend of 17.5sen, which provides a dividend yield of 5.7%. However, OSK is maintaining its fair value for Pos at RM4.12 with a BUY call. It closed at RM3.32 yesterday.
On 29th March 2011, Business Times reported unconfirmed sources said that Khazanah had just shortlisted 3 out of 5 parties bidding for its 32% stake in Pos.

Who are they?
The 2 candidates that already failed are:
  1. Scomi Bhd
  2. Tricubes Bhd
The 3 still-in-run candidates are:
  1. Nationwide
  2. MPC-Amanah REIT
  3. DRB-Hicom
The shortlisted parties will make a final presentation today to Khazanah and McKinsey & Co, who is the adviser. Pos' book value per share stands at RM1.54 and it is known that 3 shortlisted candidates are bidding at between 2.2x and 3x. This implies an offer of RM3.38 - RM4.62 per share. It was reported that the ultimate winner will be announced by the Prime Minister during Invest Malaysia 2011 on 12th April (Tuesday).

What is in the offing from the 3 candidates?
Of the names, each has its own niche expertise, with one looking to inject a bank (likely Syed Mokhtar's Bank Muamalat), one with a logistics expertise (Nationwide) and the other a property developer (MPC and Amanah REIT). It was previously rumored that Syed Mokhtar (DRB) is offering RM1bn for Khazanah's divested stake, which works out to be RM5.78 per share. (OSK Research)

What is so exciting about Pos Malaysia?
  • Relaxation of Postal Act, which could allow Pos Malaysia to re-develop some of its land parcels to unlock the value of its land-bank.
  • Expanding revenue from offering shared banking services with RHB and Maybank.
  • Plans to introduce a new direct address mail service soon. Advertisers can channel some of their advertisement spending to direct address mail to target customers.
Recent DRBHCOM share price movement

Finance Malaysia's prediction...
While not able to access the inside information, Finance Malaysia looks at a different angle to predict the ultimate winner, this time via technical analysis. Judging from the past weeks price movements, DRB Hicom is signaling something boiling behind. Today, DRB closed at RM2.16. Would it be the one?


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