The Said Article Suggesting Gamuda Could Be Privatised And The Rebuttal from Gamuda

Here's the link to the said article insinuating that Gamuda might be privatised,h7 July 2008: Corporate: Gamuda to be privatised?

• 7 July 2008: Corporate: Gamuda to be privatised?
  By Siow Chen Ming
  
  With the market plunging, talk of Gamuda Bhd being taken private has surfaced.
  
  Several groups of investors, with the help of Middle Eastern funds, are said to be working out a deal to take the construction giant private, it is learnt.
  
  With its market value having declined from RM11.5 billion earlier this year to RM4.55 billion, Gamuda offers investors a golden opportunity.
  
  Its share price closed at RM2.27 last Friday.
  
  "If things pan out, there should be some developments in a month or two," says a source.
  
  Given Gamuda's few shareholders, a takeover would only succeed if there is support from the two existing substantial shareholders.
  
  The Perak royal family, through Generasi Setia (M) Sdn Bhd, is still the largest shareholder of Gamuda with a 7.51% stake. Close behind is Platinum Investment Management Ltd, which held a 7.49% stake as of June 26.
  
  Sources do not discount the possibility of Platinum participating in a takeover of Gamuda. It is believed that the Australian investment firm is aligned to an investment group which is backed by a Middle Eastern fund. It is said that the fund investors are keen on Gamuda because of its construction expertise.
  
  Platinum has been active in acquiring shares in Gamuda. It emerged as a substantial shareholder in early June with a 5.3% stake. Over the past month, it has increased its equity interest to 7.49% and is likely to keep accumulating shares, which indicates it could have more in mind.
  
  There may be other groups eyeing Gamuda as well, sources say. If indeed several offers emerge, including one by Platinum to take Gamuda private, Generasi Setia would determine who gets to make a successful offer.
  
  Generasi Setia would have to be convinced before a privatisation or even takeover can materialise.
  
  The company, which had been gradually selling down its stake in Gamuda from the beginning of the year, stopped disposing of the shares from May 23.
  
  Presumably, it is waiting for a good price from prospective parties. According to industry officials, it is no secret that Generasi Setia wants to divest or reduce its holdings in Gamuda. This became more evident after Gamuda's managing director Datuk Lin Yun Ling reduced his stake in the company from 5.23% to 1.73% in February.
  
  There are no other substantial shareholders in Gamuda apart from Generasi Setia and Platinum. Fidelity's FMR LLC & FIL Ltd recently sold down its holdings to a non-substantial level following the reduction in Lin's interest in the construction giant.
  
  The sparse shareholding structure has created a power vacuum in Gamuda, which makes it an appealing target for takeover apart from its depressed market valuation.
  
  "Gamuda does not have a controlling shareholder now. While Lin is still in control of management, the perception is that he may not give the same level of commitment after he sold down his stake," says a fund manager.
  
  However, Lin and his management team have dispelled such a notion numerous times. A source says the management team is against the idea of a takeover that may result in changes in the company's direction.
  
  Two weeks ago, Lin entered into a fresh five-year contract to stay on as Gamuda's managing director. The message sent is that the management team is here to stay no matter what the shareholders have in store for the company.
  
  Sources say the idea behind the privatisation of Gamuda surfaced after attempts to merge the company with IJM.
  
  The idea was to create a bigger construction group, with Middle Eastern funds and the Employees Provident Fund (EPF) as major shareholders, which could make a larger impact on the Middle East construction sector. The EPF is currently the dominant shareholder of IJM with a 19.74% stake.
  
  Presumably, the benefit of having a Middle Eastern fund as shareholder is to help open doors when bidding for mega projects in the Gulf region.
  
  However, sources say the proposal to merge the two construction giants was difficult as it was too big a deal for either management to digest. There was also the view that the merger would not necessarily add value.
  
  The promoters felt that without the endorsement of management, it would be difficult for a merger to be carried out, even if the shareholders wanted it.
  
  Gamuda, however, is an attractive takeover target. It has concession assets such as the Sprint and Kesas highways and interest in water treatment plants.
  
  The tricky part is still management. While the interested parties could acquire shares on the open market and increase their shareholding to a significant level or close enough to take Gamuda private, could they win over the existing management team?
  
  And people are the key assets for companieslike Gamuda.
  
  As Lin put it in an interview a few months ago, construction is a people-driven business. While he admitted that Gamuda could become a takeover target if its market valuation continued to be depressed, he said it would not be a straightforward proposition due to management issues.

Everything based on sources.

If there is any credibility to such reporting, why doesn't the Edge states precisely who the sources are?

And posted on Bursa Malaysia, Article Entitled: "Gamuda To Be Privatised?"

• We refer to the above article which appeared in The Edge, pages 1 & 17, on Monday, 7 July 2008 where it was quoted as follows:-
  
  "Several groups of investors, with the help of Middle Eastern funds,.....to take the construction giant private,......"
  
  We wish to clarify that as at the date hereof, Gamuda Berhad ("the Company") has no knowledge and has not been notified of any change in the substantial shareholders of the Company. We will make the appropriate announcement in accordance with the Listing Requirements in the event that there is any corporate exercise or change in substantial shareholder.
  
  This announcement is dated 8 July 2008.
  

Now that Gamuda had made rebuttal to this privatisation story told by this sources and now that Gamuda had surged, what are we going to do?

How?

Do you reckon that our financial press should be allowed the freedom to write as they wished based on unnamed sources?

And to top it off, the daily Edge carried another article!!!!!
08-07-2008: Gamuda's share price rises on privatisation talk

• 08-07-2008: Gamuda's share price rises on privatisation talk
  by Nadia S Hassan
  
  KUALA LUMPUR: Construction player Gamuda Bhd saw its share price spike yesterday on news that the company may be taken private and that a buyout offer for its stake in the Selangor state water concession is in the offing.
  
  The counter jumped 20 sen or 8.8% to RM2.47. This is a turnaround for the stock, which has been languishing over the past few months due to a slew of negative analyst reports as well as fears that the construction sector is facing a slowdown.
  
  Gamuda's share price closed at a 52-week low of RM2.13 on June 23.
  
  Over the weekend, The Edge weekly reported that several groups of investors, with the help of Middle Eastern funding, were working on a plan to buy out the company.
  
  In a separate development, Kumpulan Darul Ehsan Bhd (KDEB) announced last Friday that it had been given the federal and state authorities' go-ahead to consolidate four water concessionaires in the state to be managed in a holistic manner by KDEB.
  
  On the news of the privatisation, CIMB Research noted that the speculation was not new.
  
  "We view the potential privatisation of Gamuda by a Middle East fund as positive however. Though we deem the news as purely speculative at this point with scanty details on the pricing and structure of the deal, one key advantage should this plan materialise is that it could enhance Gamuda's presence in the Middle East," said CIMB.
  
  At the moment, about 7% of Gamuda's outstanding order book comes from the Gulf region.
  
  Macquarie believed that Gamuda's loose shareholding structure and depressed valuations make it a prime takeover target.
  
  "We believe that the acquisition of Gamuda might make sense for Middle East investors, as the company does have strong civil infrastructure skills, which most of the Middle East construction companies currently lack," said Macquarie.
  
  Another added bonus is that Gamuda's managing director Datuk Lin Yun Ling has only recently signed a five-year management contract with the company.
  
  "Hence the buyer of Gamuda would be assured of management continuity, a key factor for the company," said Macquarie.
  
  The Perak Royal Family currently holds a 7.5% stake in Gamuda via Generasi Setia, while Platinum Investment Management holds another 7.5%.
  
  Both CIMB and Macquarie have an outperform call on Gamuda. CIMB's target price for Gamuda is RM3.55, while Macquarie's target price is RM3.08.
  

Ref: Rumours Why Gamuda Shares Is Moving Higher! and Why Sources Must Be Quoted In A Financial News.