Let's get it out of my head

A colleague of mine has such great passion for Proton that no matter what someone says about Proton, Proton is always the best in the world. If something good is said about Proton, he’ll hype it up, and if something not too nice is said about Proton he will be very defensive – almost confusing many about whether he secretly works for Proton. Haha!

So many have asked me about the Proton- DRB drama, so I thought I might as well talk to my blog about it too. It’s been in my head since a few weeks now. Why I call it drama is because the effect of it has made a price that was never to brave to break above RM 3, surge up above RM 5 as at Friday when it was suspended. That’s like more than 90%! Suddenly when takeover talks were prompted, the price shot up, and this is still with the knowledge that Proton has not made (much) profit from Lotus. Ok la, my colleague tadi memang pro Lotus, so that’s why also.

Now, DRB-Hicom has successfully negotiated the purchase of Khazanah’s 42.7% stake in Proton at RM5.50 per share. So, it will then have to make a mandatory general offer (MGO) for the remaining shares at RM5.50 each and this happens when one buys a stake of more than 33%. Substantial shareholder now has switched to DRB. So, if you were a shareholder, even for just one unit, would you prefer DRB to lead or Khazanah?

Was DRB not the controlling stakeholder back in the earlier days until the Asian crisis forced it to sell proton to Petronas? I cannot quite remember. But when Mama used to work in DRB, I often hear about Proton a lot.

Privatized? Many have concluded that. DRB of course intends to do so too but this is possible if it achieves the required acceptance level for the MGO, or else they will remain on Bursa. For those with Proton shares, to stay or to exit the company, they still need to be given the option to choose. In the likes of any takeovers/M&As, DRB will take Proton on a let’s-amend-these-losses-and-go-on-to-make-profit journey. Synergies baby! 1 + 1 = more than 2 :P

On what basis is DRB buying Proton? Debatable in many ways. We’re talking about RM 5.50 a share, that on its own speaks volume. Well let’s see where this will go, nothing’s quite finalized yet for now. Give it 2 months I reckon.