KUALA LUMPUR (May 28): Shares in Ranhill Utilities Bhd (KL:RANHILL) plunged as much as 21.7% to RM1.23 on Tuesday, following news of YTL Power International Bhd’s (KL:YTLPOWR) 70%-owned unit SIPP Power Sdn Bhd’s general offer at 99.5 sen apiece.

With the drop in share price exceeding the permitted 15% or 15 sen, Bursa Malaysia suspended intraday short-selling (IDSS) of the counter on Tuesday.

“The short-selling under IDSS will only be activated the following trading day, Wednesday (May 29) at 8.30am,” the stock exchange announced on Tuesday.

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Ranhill pared losses at Tuesday’s market close to RM1.35, still down 22 sen or 14%, becoming the sixth largest loser among all Bursa Malaysia Securities, as the group’s market capitalisation stood at RM1.75 billion.

It was the ninth most actively traded counter with 70.67 million shares traded, much higher than the counter’s three-month average volume of 6.84 million shares.

Earlier on Tuesday, SIPP Power inked a deal to purchase 405.18 million shares or a 31.45% stake in Ranhill from the group’s founder and major shareholder Tan Sri Hamdan Mohamad for RM405.18 million or 99.5 sen per share. 

The transaction would raise SIPP Power’s direct stake from 2.9% to 34.32%, triggering a mandatory general offer at the same price point for the remaining Ranhill shares not owned by SIPP Power and YTL Power.

YTL Power directly owns an 18.87% stake in Ranhill, resulting in it collectively controlling a 53.19% stake in the group when taking into account SIPP Power’s increased 34.32% stake

The offered price tag of 99.5 sen apiece represents a 36.6% discount to May 27’s closing price of RM1.57, and a 20.95% discount to the prevailing three-month volume-weighted average price of RM1.37.

Meanwhile, SIPP Power and YTL Power have stated their intention to maintain Ranhill’s listing status on the Main Market of Bursa Malaysia. 

According to YTL Power, the acquisition represents an opportunity to acquire a mature business operating in segments closely correlated with the group's existing core competencies and will complement its utilities portfolio, both geographically and operationally.

Since YTL Power’s emergence as a substantial shareholder in Ranhill back in November last year, the block of shares owned by Hamdan, who is also Ranhill’s chairman and chief executive, has been in the spotlight. 

Notably, Ranhill has exclusive rights to Johor’s water supply services and a presence in the Sabah power sector. The group is actively expanding its footprint in the renewable energy (RE) sector through its soon-to-be-operational 50MW large-scale solar (LSS4) plant in Bidor, Perak.

Similarly, YTL Power is building its presence in Johor and RE through the upcoming phase one of its 72MW data centre and a 500MW solar farm in Kulai, Johor. YTL Power has also expressed interest in participating in RE exports to Singapore, pending finalisation of the RE export framework by the government.

Shares in YTL Power rose four sen or 0.81% to RM5 at the closing bell on Tuesday, valuing the group at RM40.99 billion. 

https://www.theedgemarkets.com/node/713326