Petronas offers to buy shipping unit MISC's remaining shares

KUALA LUMPUR (REUTERS) - Malaysian state oil company Petronas has made an RM8.8 billion (S$3.5 billion) offer to buy out other shareholders in shipping unit MISC and delist it.

Petronas, which owns 62.7 per cent of MISC, made an offer for the remaining shares at RM5.30 per share, according to a stock exchange filing on Thursday.

Petronas, which provided no reason for its plans, said it intends to delist MISC from the local stock exchange if its offer is accepted.

"It makes sense for Petronas, but the market loses a large liquid stock. Nevertheless, it's a sweet deal for those who own MISC stock, since the offer price is at an RM0.8 premium," a Kuala Lumpur-based fund manager with a foreign asset management company said.

"Without the shareholders breathing down their neck, Petronas can concentrate on supporting this company," he added.

MISC closed down 0.89 per cent at RM4.45 per share on Thursday.

MISC's financial performance was disappointing in the third quarter, as losses from its petroleum and chemical segment alongside a smaller contribution from its heavy engineering division took a toll.

Petronas bought a 29 per cent stake in MISC in 1997 and then raised it to over 60 per cent the following year. The increase helped MISC purchase ailing Konsortium Perkapalan, a shipping company controlled by a son of then Prime Minister Mahathir Mohamad. MISC paid for the deal in cash and by assuming debts owed by Perkapalan.