About SP Setia

PNB is believed to be looking into the possibility of improving its offer to SP Setia shareholders, particularly its CEO Tan Sri Liew.

In this respect, it is learnt that PNB is working out a package for Liew in which he will have the option to divest his interest in SP Setia at a higher price over a period of three to five years provided that the company meets the milestone set. This is to entice hom to stay put at the company.

Sources say there has also been discussion about PNB improving its offer price of rm3.90 per share. Some believe this is unlikely to happen as PNB has maintained that the price is fair. But the deliberations on such matters is one of the reasons why the offer document is still not out yet.

It is learnt that during the period in which Liew has to meet the milestone set, he would continue to run the show. For that period, Liew will oversee the senior management of the company as well as the appointment of contractors.

Speculation is rife that the general offer by PNB for SP Setia had even attracted the attention of the top people at Putrajaya. It is said that an intervention by top officials at Putrajaya led to both PNB and Liew re negotiating the takeover offer.

PNB was supposed to have sent out the offer documents for its general offer to SP Setia shareholders by Oct 19, 2011, but they have yet to release. According to the Malaysian Code on Take-overs and Mergers 2010, the offer documents are to be sent out within 21 days of making the offer. It now has to send out of the offer documents within two days of the SC’s clearance of the offer document.

PNB recognizes that the talent at SP Setia is valuable to the company and is exploring incentive to ensure that they continue to stay on with the company.

It is not surprising that PNB may be considering an incentive package for the senior management, and specially Liew who is credited with building and growing the company to where it is now.

The rm3.90 per share offer values the property company at 2.15 times its price to book value as at July 31, 2011. Its five year historical average is 2.22 times.

Since the MGO was announced, PNB and funds under its management have increased their shareholding over 39% by acquiring shares and warrants on the open market. The offer is conditional upon PNB receiving more than 50% of the voting shares of SP Setia.