KUALA LUMPUR (May 13): Shares of Sungei Bagan Rubber Co (Malaya) Bhd (KL:SBAGAN) and its related companies extended their gains on Monday, as investors continued to bid up the stocks on news of the buyout of Singapore’s Great Eastern Holdings Ltd.

Sungei Bagan rose over 20% to an intraday high of RM6.76. Sister company Kuchai Development Bhd (KL:KUCHAI) climbed over 9% to RM2.34, while parent Kluang Rubber Company (Malaya) Bhd (KL:KLUANG) added over 14% to RM6.06. At those intraday highs, all three stocks were at their highest in nearly two decades.

At stake is Sungei Bagan’s 4.763 million shares in Great Eastern, which has received a voluntary offer from Oversea-Chinese Banking Corp (OCBC). Sungei Bagan’s equity in Great Eastern, equivalent to 1%, has a value of S$121.93 million (RM426.88 million) based on the price offered by OCBC for an 11.56% stake it does not own in the Singapore-based insurer for S$1.4 billion (RM4.9 billion).

At Monday's market close, Sungei Bagan was up RM1.06 or 18.93% at RM6.66, valuing the plantation company at RM441.78 million. Kuchai Development was 17 sen or 7.94% higher at RM2.31, giving the company a market capitalisation of RM285.86 million.

Meanwhile, Kluang Rubber was up 64 sen or 12.05% at RM5.95, valuing the company at RM375.87 million on Bursa Malaysia.

Sungei Bagan’s stake in Great Eastern was initially just 1.73 million shares at the beginning of the year.

Just days before OCBC announced its voluntary offer, shareholders of Kuchai Development approved a move to dispose of all of the company’s assets and liabilities — including a 3.032 million share block in Great Eastern — for 27.5 million Sungei Bagan shares issued at RM10.01 each.

Kuchai Development will then distribute the Sungei Bagan shares to its shareholders on the basis of 222 Sungei Bagan shares for every 1,000 shares held under a broader restructuring involving both companies.

Both Sungei Bagan and Kuchai Development are controlled by Kluang Rubber, with stakes of 43.5% and 42.21% respectively.

In turn, Kluang Rubber is controlled by Singapore-based The Nyalas Rubber Estates Ltd. Nyalas is the private vehicle of Lee Thor Seng, who is related to the Lee family of Singapore, a major shareholder of OCBC.

Kluang Rubber will also see its equity in Sungei Bagan rise from 30.72% to 43.12%, following Kuchai Development’s distribution exercise of Sungei Bagan shares.