DRB-HICOM denies privatisation plan

DRB-HICOM has announced to Bursa and denies the privatisation plan. Here's the announcement gathered from Bursa website:


We refer to the letter dated 9 December 2010 from Bursa Malaysia Berhad with regard to the above article appeared in the New Straits Times, Business Times, Cover Page on Thursday, 9 December 2010, in particular to the following sentences :


(i) “Tan Sri Syed Mokhtar Al Bukhary is believed to be considering taking auto and banking group DRB-HICOM private….”
(ii) “There has been speculation that Syed Mokhtar could offer anywhere between RM2.20 and RM2.70 for the DRB-HICOM shares he does not own”


DRB-HICOM wishes to state that the Company is not aware of such proposal nor have we received any notice whatsoever to that effect from our holding company, Etika Strategi Sdn Bhd. 

My view:

1. When I first blog on DRBHCOM, I mentioned this Company got potential to go up to RM1.80. With the strong share price surge of DRBHCOM to as high as RM1.77 yesterday then drop back to RM1.65, the potential upside seems limited now. 

2. I am expecting some share price weakness due to this announcement of denial of privatisation plan. As the saying goes, BUY ON RUMORS SELL ON NEWS. This one even worse, because the news is actually denying the rumors.

3. Conclusion: If I am one of the Company's small investor, I will TAKE PROFIT first and wait for better price to get in again.