Prajogo to pursue bid for CASH, despite rejection

JAKARTA (JP): Prajogo Pangestu, the majority shareholder of the publicly-listed timber giant PT Barito Pacific Timber, said yesterday he will pursue his bid for Malaysia's Construction and Supplies House (CASH) despite a rejection over the deal.

"We have made an appeal to the Kuala Lumpur Securities Commission," Prajogo told reporters following Barito Pacific's annual shareholders' meeting here.

Barito's commissioner Jansen Wiraatmadja said he was still waiting for an explanation from the CASH management about the commission's rejection of the deal.

"The case is being studied by the CASH management and our representative there," he said of the Malaysian securities commission's rejection on Wednesday.

The commission did not immediately explain the reason for its rejection but analysts said that the disapproval reflected the commission's unease over Prajogo's large stake in the Malaysian company.

The deal worth over US$1.03 billion was signed in Kuala Lumpur in June in the presence of Malaysian Prime Minister Mahathir Mohamad and Indonesia's State Minister for Investment Sanyoto Sastrowardoyo.

The deal, billed as the largest cross-border acquisition on the Kuala Lumpur Stock Exchange, involved two phases.

In the first phase, Prajogo agreed to sell timber-related assets he jointly owned with his wife Herlina Tjandinegara in four Barito companies in Malaysia, China and Papua New Guinea to CASH in return for 70 percent of its shares worth around 700 million ringgit.

Prajogo, under the second stage of the deal, will exchange 210 million Barito Pacific shares for 1.89 billion ringgit or $3.46 each, in hard currency and convertible bonds from CASH.

When the transaction is completed Prajogo will own a 70 percent stake in CASH and still retain control of Barito Pacific through a 40 percent ownership of private stocks. CASH, in return, will have a 30 percent stake in Barito Pacific.

Yesterday's meeting approved the management's proposal to pay a cash dividend of Rp 50 (2.2 U.S. cents) for 1994 operations. The 1994 dividend is less than a half of the Rp 133 paid in the previous year.

Barito's after-tax profit plunged by over 50 percent to Rp 147.17 billion (US$67 million) last year from Rp 310.15 billion in 1993.

The net income per share consequently fell to Rp 105 from Rp 253 in the previous year. (hen)