Monday, November 13th, 2017

 

Chip maker Qualcomm rejects US$130b Broadcom merger bid

WASHINGTON: Semiconductor giant Qualcomm on Monday said it rejected the US$130 billion (RM545 billion) unsolicited merger bid from fellow chip maker Broadcom which would represent the biggest-ever takeover in the tech sector.

Singapore-based Broadcom made the offer last week in what would have consolidated two major players in the booming sector fueled by growth in smartphones and other connected devices.

The proposal “significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and our future growth prospects,” said Paul Jacobs, Qualcomm's executive chairman, in a statement.

Steve Mollenkopf, Qualcomm's chief executive, said the California company remains confident about its future.

“No company is better positioned in mobile, IoT (Internet of things), automotive, edge computing and networking within the semiconductor industry,” he said.

“We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G,” he said, referring to the fifth generation wireless networks in the works.

But any deal would need to pass muster with Qualcomm shareholders and could face regulatory scrutiny in the United States and other markets.

Qualcomm has been facing a series of investigations around the world linked to its dominance in the smartphone chip segment.

Broadcom's proposal came days after its CEO Hock Tan appeared at the White House with President Donald Trump to announce plans to move the tech company back to the United States from Singapore.

It comes as Qualcomm seeks a US$47 billion acquisition of Dutch rival NXP, a deal that is the subject of an European Union anti-trust probe.

A merger with Broadcom would create a behemoth with some US$51 billion in revenues, including those from NXP.

Broadcom, meanwhile, is seeking to buy US rival Brocade Communications in a deal being reviewed by Washington. — AFP


Wall Street slips on tax plan uncertainty, GE losses

WASHINGTON, Nov 13 — US stocks were lower in morning trading today as uncertainty over a US tax reform deal and GE’s dismal outlook hit investor sentiment. General Electric fell 3.5 per cent after the industrial conglomerate cut its 2018…


Bantah TPPA calls for new cost-benefit analysis on resurrected agreement

PETALING JAYA: While economists are largely positive on the resurrection of the Trans-Pacific Partnership (TPP), now known as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), Bantah TPPA believes that a renewed cost-benefit analysis is warranted to determine the impact of the amended deal on Malaysia.

According to Bantah TPPA deputy chairman Azlan Awang, the previous report has become irrelevant after the US pullout.

“We should do a new cost-benefit analysis because previously we were told that we will achieve economic gain by having access to the US market, but now (with the US pullout) there is no more benefit there – only cost,” he told SunBiz today.

“The people also need to know what are the benefits that they will get as the US is no longer in the pact,” he said.

The TPP covered 40% of the world economy before US President Donald Trump abandoned the 12-nation deal in January, following through on a promise made during his presidential campaign. It is now left with 11 member countries, namely Australia, Brunei, Chile, New Zealand, Peru, Singapore, Vietnam, Japan, Malaysia, Canada and Mexico.

Over the weekend, it was announced that the TPP has been resurrected as the CPTPP, but some issues remain to be finalised, such as state-owned enterprises (Malaysia), service and investment non-conforming measures (Brunei), dispute settlement (trade sanctions) and cultural exception (Canada).

Asian Development Bank lead economist Dr Jayant Menon said the geopolitical and economic impact could be significantly diminished without the US, but it is unclear by what magnitude.

“The loss of the carrot of improved access to the huge US market is a big disincentive for small, open trading nations like Malaysia,” he told SunBiz in an email reply.

He said for the CPTPP to have a meaningful impact, additional members will have to come on board.

“Countries such as Thailand, the Philippines and Indonesia have indicated interest in doing so, filling some of the void created by the departure of the US, but many more will have to sign up too.”

Affin Hwang Investment Bank Bhd chief economist Alan Tan Chew Leong said in the short term, the impact from the new TPP may not be as positive without the US. However in the long run the revival of TPP will be positive for Malaysia as a pioneer member, with potential of increasing exports to member countries.

Nonetheless, he noted that with Japan leading the pact, it will set a trade landscape or platform that could attract the US.

Sunway University Business School Professor of Economics Dr Yeah Kim Leng concurred, saying any effort to boost the regional trade agreement is positive for an open economy such as Malaysia given the high dependency on trade.

Commenting on the exclusion of 20 provisions, including those in the intellectual property segment, specifically biologics, patent term adjustment and copyrights, Yeah said it is a temporary relief for Malaysia as the nation will not be subject to the stringent requirements, but stressed the need to become ready to meet the stringent requirements in the long term to attract foreign investors. He expects that the terms agreed on state-owned enterprises (SOEs) will remain.

Recall that Malaysia managed to preserve the bumiputra agenda, obtain a minimum five-year grace period to reform SOEs, and gain exemption for Khazanah Nasional Bhd from investor-state dispute settlement provisions for two years after the deal comes into force, as part of the many far-reaching exemptions under the original TPPA.

Azlan is urging the government to take a strong position in demanding the suspension of provisions that he said put the country in a vulnerable position. Among his major concerns are the international convention for the protection of new varieties of plants, investor-state dispute settlement under the investment agreement and investment authorisation chapter, intellectual property, government procurement, as well as the SOE chapters.


Qualcomm rejects US$130b Broadcom merger bid

WASHINGTON, Nov 13 — Semiconductor giant Qualcomm today said it rejected the US$130 billion (RM544.6 billion) unsolicited merger bid from fellow chip maker Broadcom which could represent the biggest-ever takeover in the tech sector….


Floor plan, pricing issues trip Tiger Synergy MoA

PETALING JAYA: Prosma Bhd terminated the memorandum of agreement (MoA) to acquire Telaris Gombak from Tiger Synergy Bhd due to several changes in the project which it did not agree with.

Prosma CEO Zamri Abdullah said under the MoA which was signed earlier in June, the developer had agreed to build 180 units of affordable condominiums sized at 1,000 sq ft each, to be sold at RM400 per square foot (psf) each.

“But during a subsequent meeting, they came out with a letter saying that they cannot change the floor plan due to plot ratio issues and because of that, the units would be sized at 800 sq ft and 900 sq ft, while the price would be increased to RM450 psf,” he told SunBiz.

Zamri said under the MoA, it can opt to not go ahead with the purchase of Telaris Gombak if it is unable to agree on the pricing. He also assured that none of the applicants under Prosma’s rent-to-own (RTO) scheme are affected by the termination, as it had not signed any contracts with applicants for Telaris Gombak units.

On Monday, Tiger Synergy told Bursa Malaysia that it had aborted the MoA with Prosma as it could not reach a consensus on the terms of the MoA during the negotiation period.

To recap, Tiger Synergy’s wholly-owned subsidiary Tiger Synergy Timber Sdn Bhd had entered into the MoA with Prosma on June 29, 2017 with the intention to enter into a conditional sale and purchase agreement (SPA) for the en bloc sale of Telaris Gombak to Prosma.

The en bloc sale was expected to generate some RM30 million profit to Tiger Synergy over three years. The two parties had expected to sign the SPA in September or October.

The project was to be built on 5.5 acres in Kuala Lumpur with an estimated gross development value of RM100 million. The 180 units with eight commercial shoplots were to be developed over three years, after which it would be sold to Prosma.

Prosma, the vehicle tasked to acquire assets for an RTO scheme under Sekretariat Komuniti Prefer Malaysia (SKPM), had planned to offer the units at Telaris Gombak to applicants of its RTO scheme.

The units at Telaris Gombak were valued at RM400,000 to RM500,000 each and designed to cater to young earners. Eligible applicants were expected to rent the units for 30 years under Prosma’s RTO scheme at a rental rate of RM2,000 to RM2,500 per month.

Prosma has a strategic collaboration with SKPM, a community created on the back of a private initiative to assist the government in providing residences to 30% of the population. The RTO scheme is targeted at those who earn RM5,000 and above, offering units valued at RM300,000 to RM500,000 each.

When contacted, Tiger Synergy managing director Shirley Tan Lee Chin maintained that the reason for calling off the deal was because the two parties could not reach a consensus on the terms for the MoA, without elaborating further.


Tiger Synergy: Affordable condo project for Prosma’s RTO scheme is off

PETALING JAYA: Tiger Synergy Bhd has aborted its plan to develop an affordable condominium project named Telaris Gombak for Prosma Bhd’s rent-to-own (RTO) scheme.

The property developer said in a filing with the stock exchange today that the memorandum of agreement (MoA) was aborted as consensus on the terms and conditions could not be reached.

The gross development value (GDV) for the project was estimated at RM100 million.
Last June, Tiger Synergy’s wholly owned subsidiary Tiger Synergy Timber Sdn Bhd signed an MoA with Prosma to develop Telaris Gombak on 5.5 acres of land with a GDV of RM100 million.

The project comprised 180 units sized at 1,000 sq ft each and eight commercial shoplots to be developed over three years, after which it would be sold en bloc to Prosma.
Prosma’s plan to relaunch and rebrand the RTO scheme in October following a fresh mandate from the government to supply 50,000 homes under the programme, has been delayed.

Tiger Synergy shares rose half a sen or 11.1% to 5 sen today on some 9.67 million units done.


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Bitcoin rebounds over US$1,000 after losing almost a third of value

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Tadmax partners Kepco for Pulau Indah power project

PETALING JAYA: Tadmax Resources Bhd has entered into a Joint Development Agreement (JDA) with Korea Electric Power Corporation (Kepco) for a new 1,000MW combined cycle gas-fired power plant (CCGT) in Pulau Indah, Selangor, which will be undertaken via a project company named Tadmax Indah Power Sdn Bhd (TIP).

The news comes after Tadmax said in May 2017 that it will develop the project on its own with the help of a technical partner, after its original partner Tenaga Nasional Bhd claimed to not being keen on the project because of its own jobs.

The group announced in a Bursa Malaysia filing that the two parties have formed a consortium for the project which will sit on Tadmax’s own piece of land in Pulau Indah.

The consortium which will be led by Tadmax, will work and prepare the Technical and Financial Proposals needed for submission to the Energy Commission (ST) by Aug 1, 2018. TIP will also serve as the channel of engagement with relevant parties in relation to the project.

The JDA will be subjected to the approval of the ST. Kepco whose majority shareholder is the government of South Korea, has expressed its intention to secure 25% equity interest in TIP upon the successful implementation of the JDA.

“During this phase of project development, each party shall bear its own internal costs and Kepco has agreed to bear 25% of direct and external third party cost,” Tadmax said.

The group said the JDA is in compliance with the EC’s letter dated Sept 13 for a suitable and active technical partner for the project. The group is also of the view that the JDA could potentially lead to a shareholders’ agreement between the parties.

Kepco is South Korea’s largest state-owned public utility company with assets of US$147 billion (RM615.9 billion) and annual revenue of US$50 billion. The South Korean government owns 51% of Kepco’s shares.

Tadmax’s shares remained unchanged at 36.5 sen with some 1.5 million shares traded.


Tadmax-Kepco in power project

PETALING JAYA: Tadmax Resources Bhd has entered into a Joint Development Agreement (JDA) with Korea Electric Power Corporation (Kepco) for a new 1,000MW combined cycle gas-fired power plant (CCGT) in Pulau Indah, Selangor, which will be undertaken via a project company named Tadmax Indah Power Sdn Bhd (TIP).

The news comes after Tadmax said in May 2017 that it will develop the project on its own with the help of a technical partner, after its original partner Tenaga Nasional Bhd claimed to not being keen on the project because of its own jobs.

The group announced in a Bursa Malaysia filing that the two parties have formed a consortium for the project which will sit on Tadmax’s own piece of land in Pulau Indah.

The consortium which will be led by Tadmax, will work and prepare the Technical and Financial Proposals needed for submission to the Energy Commission (ST) by Aug 1, 2018. TIP will also serve as the channel of engagement with relevant parties in relation to the project.

The JDA will be subjected to the approval of the ST. Kepco whose majority shareholder is the government of South Korea, has expressed its intention to secure 25% equity interest in TIP upon the successful implementation of the JDA.

“During this phase of project development, each party shall bear its own internal costs and Kepco has agreed to bear 25% of direct and external third party cost,” Tadmax said.

The group said the JDA is in compliance with the EC’s letter dated Sept 13 for a suitable and active technical partner for the project. The group is also of the view that the JDA could potentially lead to a shareholders’ agreement between the parties.

Kepco is South Korea’s largest state-owned public utility company with assets of US$147 billion (RM615.9 billion) and annual revenue of US$50 billion. The South Korean government owns 51% of Kepco’s shares.

Tadmax’s shares remained unchanged at 36.5s en with some 1.5 million shares traded.