PTT Plc proceeds with its plan to diversify into coal energy, through the voluntary cash offer of 1.2 billion Singapore dollar (US$900 million) for the remaining shares in Singapore-listed Sakari Resources (SAR).
PTT’s offer is $1.90 for each share of SAR. PTT President and CEO Pailin Chuchottaworn said in the statement to the Stock Exchange of Thailand that the offer is conditional, as PTT Group seeks to win more than 50 per cent of voting rights in SAR. The offer is expected to be completed by October 2012.
“The offer reflects PTT’s intention to increase its investment in SAR and enhance its strategic growth in the coal business. PTTML does not currently intend to maintain the listing status of Sakari Resources, if Sakari Resources’ free float falls below 10 per cent as required. However, PTTML reserves the right to reevaluate its position at the relevant time, bearing in mind the ultimate level of acceptances received by PTTML and the prevailing market conditions,” he said.
Bualuang Securities said in a research note that the price is reasonable. Though the offer price is 27 per cent higher than SAR’s closing price on Friday, but equal to its 52-week average. “We think it’s reasonable, given the scope for reserve upgrades and production growth. Production is targeted to rise to 14 million tonnes in 2013 and to 17 million tonnes in 2014, from 12 million tonnes in 2012.”