The shares of the two companies are cheaper than regional counterparts, and most of their stocks are owned by shareholders without significant stakes, making an acquisition easier, Sunaina Dhanuka, a Kuala Lumpur-based analyst at Macquarie, wrote in a report yesterday.
"Companies like Gamuda and IJM could be ideal targets," said Dhanuka, who has an "outperform" rating on both stocks. "Few Middle Eastern companies have the skills required to undertake large infrastructure projects. Gamuda's skills are likely to be the most sought after."
Persian Gulf investors are spending US$2.4 trillion (US$1 = RM3.24) on local construction projects, according to Dubai-based research company Proleads. Shares of Gamuda and IJM, which have built tunnels, roads and railways across Asia, have tumbled this year on concern growth is slowing at home, and Malaysia's Edge newspaper on July 20 reported a possible bid for Gamuda by a Middle East fund.
Gamuda shares, down 44 per cent this year, rose 10 sen to RM2.69 yesterday, giving the company a market value of RM5.4 billion. IJM fell 15 sen to RM5, extending this year's drop to 42 per cent and cutting its market value to RM4.3 billion.
Gamuda's largest shareholder, the Malaysian royal family in the state of Perak, supports the takeover plans by a Middle East fund, according to a newspaper report, which didn't name the possible buyer. The acquisition of the royal family's 7.5 per cent stake is crucial to any takeover, the report said.
By Bloomberg
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