SIME Has Secured 98.86%

Sime Darby Berhad (SIME) had already secured 98.86% or 1.15bn shares of UMW Holdings Bhd (UMW) as at 31 Jan 2024. In view of this, Bursa Securities will suspend the trading of the shares since SIME does not intend to maintain the listing status of UMW.

The trading suspension will start today upon the expiry of 5 market days from the Extended Closing Date (31 Jan 2024). Subsequently, UMW will be delisted and withdrawn from the Official List of Bursa Malaysia Securities Berhad.

New Benchmark on M&A

Based on the offer price of RM5.00/share, the implied forward PER and P/B ratios work out to 14.6x and 1.1x CY24 earnings and book value respectively. We believe this megadeal will be a harbinger of a new benchmark valuation for future M&A activities in the automotive sector.

Cease Coverage

With this, we cease coverage on UMW with immediate effect and our last TP is benchmarked to the offer price of RM5.00/share by SIME.

Source: TA Research - 9 Feb 2024