Merge Housing to focus on Mont’Kiara and Puchong

KUALA LUMPUR: Merge Housing Bhd will be focusing on two residential projects in its current financial year, ending on May 31, 2008. One of the projects is located in Mont’Kiara and the other in Puchong.


An artist's impression of one of the Puncak Kiara bungalows

Puncak Kiara, the 9.5-acre freehold luxury bungalow development in Mont’Kiara is a joint venture with a private landowner. Merge Housing will be handing over 16 bungalows to the landowner by January.

This leaves the developer with a remaining 23 bungalow lots with average land areas of about 8,000 sq ft each.

The company has several options to dispose of them. “We can either look out for a bulk purchaser or build bungalows and sell them individually. Such homes can easily go for between
RM5 million and RM7 million each,” said managing director Lee Kuang Chong (pix) to reporters after its annual general meeting yesterday.



The developer also plans to launch 308 condominium units at its Puchong development called 983 Puchong. It has a gross development value of RM90 million and the developer is in the midst of submitting the building plans to the relevant authorities.

Lee also expressed the group’s interest in moving into the leasing business to generate rental income in the next one to two years. “For instance at our 1st Jelutong development, we have secured Tesco as the anchor tenant. We are now trying to approach food and beverage operators, banks as well as departmental stores,” said Lee.

Located in Bukit Jelutong, Shah Alam, the 1st Jelutong commercial centre comprises three retail podium levels and a plaza level with 2- and 3-storey shop offices. It has an estimated sales revenue of RM200 million.

For its 2007 financial year ended May 31, the group recorded a profit after tax of RM2.2 million, reversing a loss of RM14.5 million recorded in the preceding year.

By theSun (by Loo Pik Kwan)

Analysts positive on E&O, E&O Prop merger

KUALA LUMPUR: Analysts have responded positively to Eastern & Oriental Bhd’s proposed merger with its 63% owned subsidiary E&O Property Development Bhd, believing such an exercise to be of strategic sense and expecting it to be a success based on the E&O brand and the group’s track record.

Following the announcement on Tuesday, E&O Property’s share price rose 11 sen to close at RM2.56, with 1.39 million shares done, while E&O’s share price rose one sen to close at RM2.41, with 372,900 shares done. E&O Property and E&O were traded at their intra-day high of RM2.70 and RM2.45, respectively.

Kenanga Research said some advantages of the consolidation included the streamlining of operations and E&O group would have a higher earnings capacity leading to greater market influence under one listed company and in turn significantly expedite the group’s expansion locally and overseas, especially in the climate of the property market boom in Southeast Asia.

“Given both E&O Property’s and E&O’s track records, we believe that these benefits provide a robust base for sustainable value creation which will see fruition in the long term. Based on the E&O brand and the group’s track record, we are confident that the merger will prove to be a success,” it said.

On the flip side, it said there would be uncertainties in the near term relating to the companies’ share price, the foregone flexibility to raise equity funding from the market at E&O Property level and the loss of a pure property investment alternative.

Credit Suisse said the E&O group would be able to consolidate its financial operational expertise and resources to take advantage of growth opportunities and the consolidation was also expected to reduce conflict of interest and related party transactions between the two companies.

“We believe that the cash option is not attractive as the offer of RM2.50 per share is only at a 2% premium to the share price. Nevertheless, the cash option provides downside protection.

“We would advise investors to accept the share swap option instead as, if we assume a PE of 15 times for the merged entity, E&O Property should trade at RM3.15 per share, a 31% premium to its current share price,” Credit Suisse said.

Deutsche Bank said the restructuring exercise made strategic sense, creating benefits for shareholders and the company.

“First, it aligns all shareholders’ interests at E&O, removes potential share overhang at E&O Property, consolidates both companies to be on a stronger financial footing and removes holding company discounts at E&O.

“We believe E&O Prop shareholders should opt for shares instead of cash given that the cash offer is priced at a 50% discount to RNAV,” it said.

On the full share swap option, every 1,000 E&O Property shares will be exchangeable for 1,100 E&O shares. The 1:1.1 ratio is based on the five-day volume weighted average price of RM2.3808 for E&O and RM2.5222 for E&O Property up to Nov 26.

Under the fixed combination of cash and shares option, for every 1,000 units of E&O Prop shares held, 650 E&O Property shares are exchangeable for 715 E&O shares and the remaining 350 E&O Property shares will be exchanged for RM875 cash.

For the maximised cash option, minority shareholders may get RM2,500 for every 1,000 shares held in E&O Property. Each E&O Prop share is valued at RM2.50, based on the prevailing five-day market prices of between RM2.45 and RM2.61 up to Nov 26.

E&O has ready funding of about RM213 million in the event all minority shareholders of E&O Property opted for the fixed combination option. Hence, it said the cash option was subject to the balance of funding available for the full share swap and after fixed combination options had been determined.

“In any event, the minimum amount for cash redemption will be RM875 for every 1,000 units of E&O Property share. Any balance not redeemed in cash shall be settled by way of share swap in a ratio of one E&O Property share to 1.1 E&O shares,” it said.

Meanwhile, E&O Property Development Bhd and the Lion group announced that they have kicked started their joint development of three blocks of 28-storey luxurious service apartments on the 1.67ha land at the former St Mary’s school site here.

By The EDGE MALAYSIA

Sime Darby targets 10% growth

KUALA LUMPUR: Sime Darby Bhd, formerly Synergy Drive Bhd, is confident of achieving a conservative 10% top and bottom line growth annually from 2008, said its president and group chief executive officer Datuk Seri Ahmad Zubir Murshid.

He said Sime Darby would be able to realise between RM400 million and RM500 million annually over the next three years from the synergies of merging Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd groups of companies.

Speaking to reporters after the launch of the company and the unveiling of its new corporate logo here yesterday, Zubir said Sime Darby was retained as the brand for the merged group as it was recognised globally and had equity value.

He said the enlarged entity would dispel the notion that it focused mainly on plantations and property, and demonstrate its leading positions in the other sectors it was involved in, namely energy and utilities, motor distributorship and heavy equipment.

Zubir said the much-debated Bakun dam project was a viable venture and would generate recurring income from 2013.

On financing the Bakun dam, he said it had various options and details would be revealed when negotiations with the government were concluded. On whether the dam project would drain its finances given the long gestation period, he said the group’s multiple core businesses would help sustain its operations as a whole.

“With the revenue and cash reserve we have, that will help mitigate some of the concerns. On top of that, we believe strongly that the integration of the plantations would generate more cash by improving our yields,” he said.

Asked of its cash reserve, he said: “We have always been conservative in terms of cash reserves, so I can only tell you that it is quite healthy.”

“We have been a very low gearing company; that is because when we invest, we look at criteria in investment. We have been very prudent investors.”

On its plans, he said Sime Darby would be investing in some of the projects in the Northern Corridor Economic Region (NCER) in line with its core business activities.

On whether it would form an alliance with Proton Holdings Bhd, Zubir said: “We are looking at the premium end in the motor business sector. This year alone we have done a lot of restructuring in our motor division (and) I believe we have turned around our motor division. So I don’t think we will take on anymore task at the moment.”

Asked to comment on analysts’ view that Sime Darby, not being a pure plantation player, would lower its valuation, Zubir said it was a conglomerate of multiple businesses where plantation accounted for 47% of total revenue.

“There is a potential of more than 50% that is non-plantation, and if the core value is considered, these products and businesses are strong in each of the sector. There are many conglomerates with multiple portfolios,” he said.

On its impending listing tomorrow, Zubir said the company would be able to make a strong comeback with investors’ support and positive market sentiment on Sime Darby.

“I look forward to the re-listing of the group. We have been off the radar screen for some time and definitely we are excited. We want to see where we are and see the confidence of the investors.”

To a question if Sime Darby would be spinning off some of its divisions, he said it was currently integrating the businesses with the next review in the year 2010, and that it depended on whether the divisions met their targets.

Prime Minister Datuk Seri Abdullah Ahmad Badawi, who described the entity as a new Malaysian icon, launched the company and its logo.

“We are witnessing today the birth of a new corporate giant. The merged entity will not be starting from ground zero, but will emerge fully formed, strong and fighting on all fronts,” he said.

By The EDGE MALAYSIA

WCT Land 3Q profit up 40% to RM15.6million

KUALA LUMPUR: WCT Land Bhd, which could be taken private by its parent WCT Engineering Bhd, posted a 40% rise in net profit to RM15.59 million in its third quarter ended Sept 30, 2007, from RM11.17 million a year earlier last year due to higher progress billings from its Bandar Bukit Tinggi II and III projects.

WCT Land said yesterday revenue rose 66.84% to RM79.31 million from RM47.54 million a year earlier while earnings per share was 1.35 sen higher at 4.82 sen. It did not declare any dividend.

Net profit for the nine month period rose 42.36% to RM45.22 million from RM31.76 million, while revenue stood at RM209.38 million, or 17.68%, from RM177.92 million a year earlier.

“The group is confident of a better financial performance for the remaining period of the current financial year,” it said.

Analysts have said that the company, whose securities have been suspended pending a corporate announcement involving itself and WCT Engineering, could be taken private.

By The EDGE MALAYSIA

Higher plantation, property contributions boost Keck Seng 3Q profits

KUALA LUMPUR: Keck Seng (Malaysia) Bhd’s net profits for the third quarter ended Sept 30, 2007 nearly doubled to RM21.32 million from a year ago, on higher income from its property development and plantation business.

This brought net profits for the first nine months of the year to RM58.05 million, up 72% from the same period last year. The jump was partly due to higher dividend income and gains from quoted shares sold under a mandatory takeover offer in the second quarter, the company said in a filing to Bursa Malaysia yesterday. Earnings per share rose to 24.24 sen from 14.11 sen before.

Revenue for the nine months rose 34.5% to RM798.48 million from RM593.81 million before as the company recognised more income from property sales and its refined oil fetching higher prices.

The company expects its plantations segment to perform better in the fourth quarter. It also expects to maintain contributions from its property development, property investment and hotel segment in the current quarter ending December 31.

“Barring any unforeseen circumstances, the performance for 2007 should be better than the preceding year,” it added.

It did not recommend any dividend yesterday.

By The EDGE MALAYSIA

YTL Corp wins RM1billion property bid in Singapore

KUALA LUMPUR: YTL Corporation Bhd has won a S$435 million (RM1.02 billion) bid for the en bloc purchase of 50 high-end residential units of the Westwood apartments located on Singapore’s Orchard Boulevard.

The purchase, which is YTL Corp’s third land acquisition in Singapore in the last two years, is the largest residential collective sale transaction since the implementation of the new en-bloc legislation on Oct 4, it said in a statement yesterday.

YTL group managing director Tan Sri Francis Yeoh Sock Ping said: “This acquisition... is well in line with our wider strategy, focusing on upscale real estate in well-established markets, which enables us to employ our branding to enhance the value of these properties.”

The company said it would not assume any liabilities arising from the acquisition, as the purchase price would be funded from internally generated funds and bank borrowings.

“The effect on gearing will depend on the mix of internally generated funds and bank borrowings utilised to fund the acquisition, which has yet to be finalised at the current date,” it said, adding that the acquisition was expected to be completed in the next quarter.

“Besides geographical diversification and an increase in the group’s existing property development landbank portfolio in Singapore, the acquisition would enable the group to enhance its earnings potential from the high sale and rental rates expected from the renewed interest in the property sector in Singapore,” said YTL Corp.

The company said it would be able to leverage on the local market knowledge, expertise and resources available as it was currently involved in the Lakefront and Sandy Island residential development projects in Sentosa Cove, Singapore.

Meanwhile, Savills (Singapore) Pte Ltd managing director Michael Ng said recent sales of well-designed branded properties among high net-worth individuals reflected the positive sentiments of the property market in Singapore.

Citing Ritz-Carlton Residence as an example, Ng said they were sold for as high as S$5,000 per sq ft, a reflection that Singapore was primed for growth in the indulgent property sector.

By The EDGE MALAYSIA

Mah Sing secures another RM560m en bloc sales

KUALA LUMPUR: Mah Sing Group Bhd has secured a RM560.6 million double coup with en bloc sales of The Icon Jalan Tun Razak (East Wing) and The Icon Mont’ Kiara to a joint venture (JV) between Kuwait Finance House KSC (KFH) and Autron Corporation Ltd.

These are the second and third en-bloc sale within four months for Mah Sing group as it had earlier sealed a RM174.4 million deal with Koperasi Permodalan Felda for the sale of The Icon Jalan Tun Razak (West Wing) in July.

“With these deals in hand, the group’s commercial en-bloc sales are valued at RM734.9 million,” Mah Sing said in a statement yesterday.

The company said the group’s unbilled sales as at Sept 30, 2007 were RM517 million and together with the latest two en-bloc sales, it now had unbilled sales of over RM1 billion.

The latest sales were conducted by its wholly owned subsidiaries Star Residence Sdn Bhd and Maxim Heights Sdn Bhd to the JV company, Prompt Symphony Sdn Bhd, a special purpose vehicle formed by KFH and an Autron unit.

Pursuant to their JV agreement, KFH and Autron will subscribe up to 80% and 20% of Prompt Symphony, respectively.

KFH is listed on the Kuwait Stock Exchange, while Autron is listed on the stock exchanges of Singapore and Australia.

Mah Sing’s group managing director Datuk Seri Leong Hoy Kum said all three en-bloc commercial sales were concluded about one year from the group acquiring the land from the vendors and were in line with the group’s model of having a quick turnaround in order to achieve a high return on equity.

The group acquired the land for The Icon Jalan Tun Razak in October 2006 and The Icon Mont’ Kiara in February 2007.

Leong said the en-bloc sale was an endorsement of the company and a stamp of approval for the group’s achievements in property development.

“In view of our branding and track record of on-time delivery, investors also have confidence in the future potential and prospects that we offer in developing high value, high quality projects in strategic growth areas,” he said.

Leong said with interest in the commercial-retail segment stronger than ever, the group was well positioned to capitalise on the country’s strong commercial-retail prospects towards enhancing its earnings stream.

The company’s next two commercial developments, namely Southgate Commercial Centre in Kuala Lumpur and Southbay City in Penang, would be launched next year, with a total gross development value (GDV) of RM1.17 billion.

Leong said the group might also look at en bloc sales of these two development projects.

By The EDGE MALAYSIA

Better offer by E&O under latest revamp plan

Under a proposal to merge with listed property arm E&O Property Development Bhd, it offers options to cater to various minority shareholders' needs

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) seems to have crafted a more attractive deal in its second attempt to restructure the group's property business.

Under its proposal to merge with 63%-owned listed property arm E&O Property Development Bhd (E&O Prop), it is offering options to cater to various minority shareholders' needs.

Datuk Terry Tham Ka Hon (left) and E&O executive director Eric Chan at the briefing

“We do learn from our previous experience, for example, issues like what are the things that minority shareholders want,” said E&O managing director Datuk Terry Tham Ka Hon.

“We failed the previous time maybe because it was a buyout,” he told StarBiz on Tuesday after announcing the proposed merger.

E&O Tuesday proposed a merger with E&O Prop via share swap at the ratio of 1,000 E&O Prop shares for 1,100 E&O shares.

E&O Prop's minority shareholders can also elect to receive a combination of cash and shares for their E&O Prop holding, on the basis of 715 E&O shares and RM875 cash for every 1,000 E&O Prop shares.

The total cash payment, assuming full acceptance via this method, is estimated at RM213.3mil.

Full cash settlement would be offered to E&O Prop minority shareholders from the “excess cash” available after the first two options, and the final amount “will be determined by the board as it may in its absolute discretion think expedient and in the best interest of the company”.

Under Section 176 of the Companies Act, this exercise will go through if 50% of its shareholders, and 75% in value of shareholding of those present during the voting, accept the proposals.

Tham, who holds 11.2% direct and 27.7% indirect stakes in E&O, said he believed it was a fair deal for the minority shareholders, as the three options offered would cater to different individual shareholders' needs.

And the proposed merger would be good for the group's long-term prospects in property development.

In May 2005, E&O made a voluntary general offer (VGO) to buy out all E&O Prop shares and warrants it did not own at 65 sen per share and 10 sen per warrant.

The deal fell through when E&O Prop minority shareholders voted against it at the EGM.

Since then, share prices of both E&O and E&O Prop have climbed substantially. So have their earnings.

Surging from below RM1 in May 2005, E&O hit a high of RM3.18 in May this year before it lost its footing amid the prevailing weak sentiment. The stock finished at RM2.41 yesterday, up one sen.

E&O Prop, formerly Kamunting Bhd, soared to a 10-year high of RM4.20 in June this year. The counter rose 11 sen, or 4.5%, to close at RM2.56 yesterday.

Tham stressed that the proposal “was a merger, not so much a privatisation exercise”.

“This is not a similar deal (compared with the proposed VGO in 2005).

“The (current) proposal gives E&O Prop minority shareholders the opportunity to continue owning shares in a listed entity, which is the parent company E&O,” he said.

An artist’s impression of Marina & Retail at Sri Tanjung Pinang in Penang to be developed by E&O Prop. The company contributes over 90% to parent E&O’s revenue

“Those who think that E&O Prop shares have higher value should swap their shares (for E&O shares) to see the share price appreciate further.

“Whereas the cash offer is for minority shareholders who want an immediate exit,” Tham said.

On the rationale for the proposal, he said the companies were “mirror images” of each other, with E&O reflecting E&O Prop's performance. E&O Prop is the major income earner for E&O, contributing over 90% of its revenue.

The corporate exercise would increase E&O share liquidity and more importantly, align shareholders' interest in a single listed entity, Tham added.

When the first proposal was mooted over two years ago, the Minority Shareholder Watchdog Group (MSWG) urged shareholders not to accept the raw deal. It said then the offer price of 65 sen was unfair to minority shareholders.

MSWG, however, has a different view on the latest proposal.

Chief executive officer Abdul Wahab Jaafar Sidek told StarBiz that the new deal looked positive and more favourable compared with the VGO.

»The deal appears fair for minority shareholders« ABDUL WAHAB JAAFAR SIDEK

“The deal appears fair for minority shareholders, especially in the current rather weak market condition,” he added.

Analysts concurred that the proposal showed better consideration for minority shareholders' interest compared with the previous VGO. They generally opined that the restructuring was a sensible move.

Deutsche Bank said the merger would transform E&O into a direct player in the property development and hospitality business, from merely being an investment holding company now. E&O's share price would also command better valuation.

Credit Suisse, which initiated coverage on E&O Prop two days ago, said in its research note the proposed merger would remove the conflict of interest and related party transactions between the two companies.

It said the cash offer was not attractive as the offer price of RM2.50 per share was only 2% premium to the share price. However, the cash option would provide support to the share price at that level.

By The Star (by KATHY FONG, DANNY YAP and LAALITHA HUNT)

Worldwide expects to sell all units in latest phase

SHAH ALAM: Worldwide Holdings Bhd aims to sell all 38 units offered under the latest phase of its Subang Bestari project within six months of its January launch.

To be completed by April 2008, this phase comprises 20 double-storey semi-detached houses and 18 double-storey detached units with a total gross development value (GDV) of RM32mil.

The 500-acre leasehold Subang Bestari is Worldwide's mixed development flagship project at Seksyen U5, Shah Alam. Group managing director Datuk Ibrahim Md Yusof said Subang Bestari was strategically located and would appeal to potential buyers.

“Subang Bistari is located in one of the most developed areas in the Klang Valley. With the opening of the Kota Damansara interchange and the link to Damansara-Puchong Highway via Mutiara Damansara, access is easy,” he told a press briefing yesterday.

“Subang Bestari is also close to the Subang airport. The decision to house the Malaysia International Aerospace Centre (MIAC) there and the possibility of it becoming a low-cost carrier terminal some day would benefit the residents,” he said.

He also said houses in Subang Bestari were generally cheaper compared with similar homes in the surrounding areas.

According to Worldwide head of marketing Abd Razak Ishak, the new houses would be priced from RM800,000 to RM1.2mil and targeted at buyers from the surrounding areas who wanted to upgrade.

Construction of the project's next phase, comprising 51 bungalows with a GDV of RM60mil, will begin by end-2008.

Asked about Perbadanan Kemajuan Negeri Selangor's move to privatise Worldwide, Ibrahim said the exercise was “ongoing” and declined further comment.

By The Star (by EUGENE MAHALINGAM)

Sime moves into premium high-end properties

KUALA LUMPUR: Sime Darby Bhd has earmarked 29.14ha near Bukit Kiara to be developed into an exclusive high-end premium residential property next year.

Dubbed “Hyde Park of Kuala Lumpur”, the yet unnamed project will comprise condominiums, bungalows and villas surrounded by greenery – a forest reserve and a 36-hole golf course. A bungalow unit there would cost a staggering RM20mil or more.

President and group chief executive Datuk Ahmad Zubir Murshid told StarBiz that the four-phase project, which would take about eight years to complete, would signify Sime Darby's bold move into the very high-end residential property market.

“We still have not decided on the total gross development value of this project but it is safe to say that we will try to attain a high level to feature a truly five-star project under Sime Darby’s property division,” he said.

Zubir said Synergy Drive was also seeking approval from authorities to locate its new corporate headquarters in the area, which will blend nicely with the group’s sustainable development tagline.

The Sime Darby group has a good reputation as a township developer in the Klang Valley.

Townships completed by the group include Sime UEP Subang Jaya, Putra Heights, Ara Damansara, Bukit Jelutong, Bukit Subang and Denai Alam.

Zubir said: “The merger has provided us with potential land-bank of 37,000 acres fit for property projects.”

Given its size, he said Sime Darby had the opportunity to seriously embark on community township developments compared with just “product” developments previously.

Under property, he said: “We have outlined various strategies with teams looking at high-end exclusive property projects, townships as well as brands for the overseas market.”

On another note, Zubir said Sime Darby did not intend to fully develop its land-bank within the next 10 to 15 years.

“Not all (the land-bank) will be converted into property projects. Some will remain as oil palm plantations, given the current bullish crude palm oil prices,” he added.

Zubir said Sime Darby was adopting the US-based Wal-Mart's marketing strategy to restrategise, consolidate as well as offer better concept, products, design and branding in its property business.

“Part of Wal-Mart’s expansion and increasing drive for profits was via its famous strategy of consolidation,” he added.

According to Zubir, post-listing Sime Darby's profits in the next two to three years would be driven by its plantation and property businesses.

By The Star (by HANIM ADNAN)

Lion, E&O Property team up for apartment project

E&O Property Development Bhd and the Lion Group will jointly develop three blocks of 28-storey service apartments in Jalan Tengah/Jalan P. Ramlee, Kuala Lumpur.

The development order was received by the two parties in May this year. The project is to be completed by mid-2008.

Total net area for the development is estimated at 940,000 sq ft, with about 660 units of sizeable service apartments.

The area will also have a retail and food and beverage component spanning 35,000 sq ft.

"This partnership truly provides an excellent opportunity for us to combine our expertise and resources, especially in development in prime urban centres, which continuously attracts buyers and investors due to its attractive capital appreciation and rental yields," E&O Property managing director Datuk Terry Tham Ka Hon said in a statement yesterday.

Lion Group's property division executive director Lionel Cheng said the group is confident of the potential of the site given its strategic location.

The project will be undertaken by a joint-venture company, Mergexcel Property Development Sdn Bhd.

E&O Property owns a 50 per cent stake in Mergexcel through its subsidiary, while Lion Group's subsidiary owns the rest.

In May last year, Mergexcel bought 1.65ha freehold land from The Synod of Diocese of West Malaysia.

The Synod was the original owner of the St Mary's school and the land on which it sits. St Mary's school will be relocated to Selayang.

By New Straits Times

E&O Property minorities advised to accept parent firm's share offer

Minority shareholders of E&O Property Development Bhd (EOPD) should accept a share offer by parent company Eastern & Oriental Bhd (E&O) as the cash offer is too low, analysts said.

Construction and property group E&O, which holds 63 per cent of EOPD, has offered to take EOPD private under a share swap.

It offered to exchange new E&O shares for the shares that make up 37 per cent of EOPD. This is on a basis of 1.1 new E&O share for every EOPD share.

In addition, minorities of EOPD can elect to get part cash. There is also a cash offer of RM2.50 a share, analysts said, citing company management.

The offer price of RM2.50 is below most analysts' expectations. Based on data compiled by Bloomberg, Credit Suisse and UOB Kay Hian value EOPD at RM4.50 and RM7.80 respectively.

At RM2.50, it also represents a mere two per cent premium to its price when suspended on Tuesday.

"We believe that the cash option is not attractive. Nevertheless, the cash option provides downside protection (in the current volatile market environment). We would advise investors to accept the share swap option instead," Credit Suisse said in its report.

The deal is due to be completed in the second quarter of next year, followed by the delisting of EOPD.

"We believe the proposal is positive for E&O as the share exchange is attractively priced, should reduce the holding company discount (and) improve liquidity," added DBS Vickers in its research notes.

EOPD shares rose as much as 10 per cent, or 25 sen, to RM2.70 before closing at RM2.56 yesterday. The stock has gained 28 per cent so far this year. E&O shares closed one sen higher at RM2.41 yesterday.

By New Straits Times (by Goh Thean Eu)

RM165million project to boost Merge earnings

Property developer Merge Housing Bhd expects future earnings to come from its projects in Mont' Kiara and Jalan Puchong, which have a total gross development value (GDV) of RM165 million.

LEE: Company intends to sign more deals to increase the worth of its developments

It is building bungalows in a gated community in Mont' Kiara.

Managing director Lee Kuang Chong said Merge Housing will hand over 16 bungalows to the landowner, comprising two families, by January.

In total, there are 39 lots spread across 3.85ha with a minimum GDV of RM75 million.

"For 2008, we are targeting to sell the remaining 23 plots of land. We are having initial talks with interested parties who want to make a bulk purchase, and we are targeting RM5 million to RM7 million per unit if we build the bungalows," Lee told reporters after the company's annual general meeting yesterday.

As for the development along Jalan Puchong, Merge Housing will build a 308-unit condominium with a GDV of RM90 million.

"We are in the midst of submitting the building approval to DBKL (Kuala Lumpur municipal), and target to launch by end-2008," he said.

Merge Housing also has two commercial plots of 20,000 sq ft and 19,000 sq ft respectively along Jalan Puchong.

"We've had people approach us to build an exhibition centre, furniture showrooms and mini-markets. We don't want to divide the parcel into shoplots," he said.

Aside from these two projects, it also has existing projects in Puchong, Subang 2 and Bukit Jelutong, Shah Alam.

The 20.25ha Puchong project is in the planning stages and the type of development has yet to be determined.

"In Subang 2 we have a balance of 81ha, and we are in the midst of getting a university college to set up there," Lee said, declining to provide a name.

He said that since the population has matured in Subang 2, Merge Housing is in talks to attract hypermarkets to set up there.

"Our strategy is to hold the land until the value can be fully realised," he said.

Lee added that Tesco hypermarket will be venturing into its Bukit Jelutong commercial development as an anchor tenant.

He also disclosed that Merge Housing will move away from being a sole developer and branch into realty.

"We are looking at signing more deals to increase the worth of our developments for the next one to two years," he said.

By New Straits Times (by Jeeva Arulampalam)