Yinson rises on news of Stonepeak’s potential buyout offer

KUALA LUMPUR: Shares of Yinson Holdings Bhd continued to rise in early trade Monday following news of a potential buyout, drawing sustained interest from investors.

The oil and gas services firm climbed two sen to RM2.36, with 10.14 million shares traded as of 10.52 am. Year-to-date, the stock has declined about 9%.

New York-based Stonepeak Partners is reportedly in exclusive talks for a buyout of Yinson, potentially valuing the firm at up to RM9bil (US$2.1bil), Bloomberg reported, quoting sources familiar with the matter.

This could be one of the largest deals in Malaysia this year.

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CIMB Securities said that if the report is accurate, it could potentially lead to a privatisation offer for the remaining Yinson shares.

It noted that the market responded positively, with Yinson’s share price rising 13.8% on June 6 — its biggest gain since June 2019. The jump narrowed the stock’s year-to-date loss from 33.7% to around 11.4%, lifting Yinson’s market capitalisation to approximately RM6.5bil.

"In our view, the exclusivity arrangement indicates that the deal has entered advanced stages of negotiation, with the Lim family, which is Yinson's founder, holding a 26.6% stake," it said.

It added that the deal would also help Stonepeak expand its exposure in Asia Pacific energy infrastructure, where Yinson has already established a solid and growing footprint.

CIMB noted that the implied valuation of about 9.5 times FY24 P/E, based on a RM9bil market capitalisation, is at a premium to the 8.2 times average FY24 P/E of Malaysia’s leading independent floating production, storage, and offloading (FPSO) operators, SBM Offshore and Modec, which currently trade at P/Es of 4.8 and 11.6 times, respectively.

“In our view, this valuation appears justifiable, underpinned by Yinson’s robust project backlog of US$20.5bil and its active portfolio of 8 FPSO contracts. Yinson’s growing presence in emerging markets further supports this premium, positioning it for long-term structural growth.

“Furthermore, Stonepeak is expected to price in the strategic value of Yinson’s expansion in FPSO contracts, particularly following Yinson’s proactive steps to strengthen its financial capacity, including securing US$1bn in funding for its FPSO unit in Jan 2025 from a consortium of institutional investors; and growth in energy transition segments, including its solar and battery storage initiatives,” the research house said.

CIMB has reaffirmed its FY26–28F EPS forecasts, buy rating, and sum-of-parts target price of RM2.93.