GLOBALLY, US$26 billion (RM108 billion) worth of privatisation transactions have been recorded so far this year, up 2,500% year on year, amid volatile markets, according to Bloomberg.

In Malaysia, so far this year, eight companies have received privatisation offers against 12 last year.

They are Amverton Bhd, TA Global Bhd, MB World Group Bhd, Yee Lee Corp Bhd, Kwantas Corp Bhd, Amanah Harta Tanah PNB and two LEAP companies — Polymer Link Holdings Bhd and JM Education Group Bhd.

It has been said that Star Media Group Bhd, Media Prima Bhd and British American Tobacco (Malaysia) Bhd (BAT Malaysia) could be candidates for privatisation.

Also, taking the cue from the proposed privatisation of Kwantas, HLIB Research says in a Sept 21 note that there could be more corporate exercises, particularly privatisation, among plantation players if crude palm oil price sustains at a high level in the near to medium term.

“Based on our observation, most privatisation targets share several similar characteristics, including low trading liquidity, low valuation and under-researched. About a third of the Bursa Malaysia Plantation Index components have these characteristics.”

They include Chin Teck Plantations Bhd, Cepatwawasan Group Bhd, Hap Seng Plantations Holdings Bhd, Kluang Rubber Co (M) Bhd, Sarawak Plantation Bhd, Ta Ann Holdings Bhd and United Malacca Bhd.

Inter-Pacific Securities head of research Victor Wan says the market could see more privatisation exercises when share prices are not reflective of the companies’ value.

“There is a correlation between the business environment and privatisation, especially when times are not so good. Certainly, there will be talk about that. Given that businesses are not doing well, with share prices being undervalued, it certainly makes more people think about it [privatisation] in this environment,” he tells The Edge.

Wan says, however, that the decision to go private rests on the management, along with its assessment of the business outlook.