Naza joins in race for Proton

Business Times understands that the Naza bid could be slightly higher than the rumoured price of RM6 to RM7 a share.

(Business Times) – The Naza Group, the country’s biggest privately-held automotive group, made a closed-door presentation to Khazanah Nasional Bhd yesterday to buy its stake in Proton Holdings Bhd.

The presentation came just a day after UMW Holdings Bhd made a similar presentation to the government’s investment fund.

UMW has a 25-year-old strong relationship with Japanese Toyota Motor Corp, the world’s largest carmaker by sales volume.

UMW, which is majority-controlled by the government’s Permodalan Nasional Bhd and the Employees Provident Fund, is also the single largest shareholder of Perusahaan Otomobil Kedua Sdn Bhd, the manufacturer of Malaysia’s second national car.

“They (Naza) have sent in a letter of intent to Khazanah to acquire Proton,” said a person familiar with the matter.

Business Times understands that the Naza bid could be slightly higher than the rumoured price of RM6 to RM7 a share.

The other bidder for the national carmaker is DRB-HICOM Bhd, the country’s biggest publicly-traded automotive company.

DRB-HICOM is controlled by Malaysia’s second youngest billionaire Tan Sri Syed Mokhtar Al-Bukhary.

Almost seven years ago, Syed Mokhtar had locked horns with the Naza Group for control over DRB-HICOM.

Against the odds, the tycoon came out tops and since then, his management team has helped transform DRB-HICOM into a profitable entity.

Khazanah has a 42.7 per cent stake in Proton, and has confirmed in recent days that it had received proposals on Proton from certain parties.

A bid at RM7 a share values Proton at RM3.84 billion, which is a steep premium over its current market value of slightly over the RM2.1 billion mark.

It is, however, still much lower than the national carmaker’s book value of RM5.4 billion or RM9.84 per share as at end-March 2011.

The Naza pitch is a stand-alone bid, with no foreign participation.

The group has been in the automotive business since 1975, and has been one of the more successful private businesses operating in the competitive automotive business.

“It has a proven track record in the business,” said the source. The Naza group — the country’s largest importer of luxury automobiles such as Ferrari, Peugeot and Brabus — has in recent years, carved a significant share in the buoyant retail car market.

It currently has tie-ups with South Korea’s Kia Motors, French carmaker PSA Peugeot Citroën, and General Motors, the US automotive giant. Naza has a manufacturing plant in Gurun, Kedah, which has rolled out more than 150,000 vehicles to date.

The Naza group had invested as much as RM500 million in May 2004 to set up the plant, which is its flagship manufacturing base.