EPF Wants More for MISC Stake Following $2.8 Billion Buyout Bid

Petroliam Nasional Bhd. should increase its 8.8 billion-ringgit ($2.8 billion) buyout offer for Malaysian shipping group MISC Bhd. (MISC), its biggest minority shareholder said.

“We are looking at a higher price for the shares than what Petronas is offering now,” said Azlan Zainol, chief executive officer of the Employees Provident Fund, which owns 9.6 percent of the world’s second-largest liquefied natural gas shipping company. “It has not been finalized yet. We will see how it goes,” he said in an interview in Kuala Lumpur today.

Petroliam Nasional, the Malaysian state energy company known as Petronas, offered 5.30 ringgit per share in January for the remaining stake it doesn’t already own. Minority shareholders Penang Development Corp. and Pacific Mutual Fund Bhd. earlier told Bloomberg News that the offer is too low.

MISC, based in Kuala Lumpur, completed a rights issue at 7 ringgit per share in February 2010. The stock tumbled 44 percent from the rights price until Petronas announced its buyout offer on Jan. 31, as the company booked losses and exited the liner industry. It’s since rebounded 19 percent to 5.28 ringgit, closer to the offer price.

MISC shuttered its container-ship business last year to focus on LNG tankers after the cargo-box unit made $789 million of losses over three years due to global overcapacity and falling rates. Last week, it reported fourth-quarter net income of $231.9 million, recovering from a $571.6 million loss during the same period a year earlier.

Petronas already owns almost 63 percent of MISC shares, according to data compiled by Bloomberg. A buyout would provide it with greater flexibility in deciding MISC’s strategic direction, the group said when making the offer.

Malaysia’s Employees Provident Fund is the second-biggest state-run pension fund in the Asia-Pacific. MISC operates the world’s second biggest fleet of LNG ships after Qatar Gas Transport Co., according to Clarkson Plc, the world’s largest shipbroker.

To contact the reporter on this story: Manirajan Ramasamy in Kuala Lumpur atrmanirajan@bloomberg.net

To contact the editors responsible for this story: Barry Porter in Kuala Lumpur atbporter10@bloomberg.net; Jason Rogers in Singapore at jrogers73@bloomberg.net