Baker Tech has accepted the offer to sell its stake in PPL Holdings (PPLH) to a consortium led by Yangzijiang Shipbuilding (YZJ), which is not surprising given the attractive offer price. The sale is subject to shareholders’ approval in an EGM (to be convened) and we note that Saberon Investments Pte Ltd, Baker’s controlling shareholder with about 69.63% stake, has agreed to vote in favour of the sale. However, not
everyone is happy with the deal, Sembcorp Marine (who has a 85% interest in PPL Shipyard) has alleged that the sale would be a circumvention of its pre-emptive rights by not giving it a first right-of-refusal over the sale. On this note, Baker Tech’s lawyers have said that Sembcorp Marine “has no basis for its claims”. A drawn-out tussle for PPLH may affect YZJ’s offshore initiatives. We maintain our HOLD rating on YZJ with S$1.60 fair value estimate.
(Low Pei Han)OCBC.
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