Ranhill shares fall by as much as 21%, intraday short selling suspended

KUALA LUMPUR (May 28): Shares of Ranhill Utilities Bhd (KL:RANHILL) plunged as much as 21.7% to RM1.23 on Tuesday following news of the general offer of SIPP Power Sdn Bhd, a unit 70% owned by YTL Power International Bhd (KL:YTLPOWR), at 99.5 sen apiece.

As the share price decline exceeded the permitted 15% or 15 sen, Bursa Malaysia suspended the counter’s intraday short selling (IDSS) on Tuesday.

“Short selling under the IDSS will only be activated on the following trading day, Wednesday (May 29) at 8:30 a.m.,” the stock exchange announced on Tuesday.

Ranhill trimmed its losses to just under RM1.35 on Tuesday, still down 22 sen or 14%, making it the sixth-biggest loser among all Bursa Malaysia securities as the group’s market capitalisation stood at RM1.75 billion.

With 70.67 million shares traded, it was the ninth most traded counter, well above the counter’s three-month average volume of 6.84 million shares.

Earlier on Tuesday, SIPP Power signed an agreement to purchase 405.18 million shares, or a 31.45% stake, in Ranhill from the group’s founder and majority shareholder Tan Sri Hamdan Mohamad for RM405.18 million, or 99.5 sen per share.

The transaction would increase SIPP Power’s direct shareholding from 2.9% to 34.32% and trigger a mandatory general offer at the same price for the remaining Ranhill shares not owned by SIPP Power and YTL Power.

YTL Power directly owns an 18.87% stake in Ranhill, meaning that the company controls a total stake of 53.19% in the group, taking into account SIPP Power’s increased stake to 34.32%.

The offered price of 99.5 sen per share represents a discount of 36.6% to the May 27 closing price of RM1.57 and a discount of 20.95% to the prevailing three-month volume-weighted average price of RM1.37.

Meanwhile, SIPP Power and YTL Power have declared their intention to maintain Ranhill’s listing on the Main Market of Bursa Malaysia.

According to YTL Power, the acquisition represents an opportunity to acquire an established business operating in segments closely correlated with the Group’s existing core competencies and will complement the Company’s utility portfolio both geographically and operationally.

Since YTL Power became a major shareholder in Ranhill in November last year, the shareholding of Hamdan, who is also Ranhill’s chairman and managing director, has been in the spotlight.

Notably, Ranhill holds exclusive rights to Johor’s water supply services and has a presence in Sabah’s energy sector. The Group is actively expanding its presence in the renewable energy (RE) sector through its soon-to-be-commissioned 50MW solar power plant (LSS4) in Bidor, Perak.

Likewise, YTL Power is expanding its presence in Johor and the renewable energy sector through the upcoming first phase of its 72MW data centre and a 500MW solar farm in Kulai, Johor. YTL Power has also expressed interest in participating in renewable energy exports to Singapore, subject to the government’s finalisation of the renewable energy framework.

YTL Power shares rose four sen or 0.81% to RM5 at close of trading on Tuesday, valuing the group at RM40.99 billion.

Also read:
YTL Power unit SIPP acquires 31.4% stake in Ranhill, triggers general offer at 99.5 sen per share