KUALA LUMPUR: Boustead Holdings Bhd, which currently owns BHPetrol petrol stations, has said “it does not rule out any new merger and acquisition (M&A), including the acquisition of any players in the oil and gas sector, if there are opportunities available at the price and terms acceptable to the group”.

In a statement to Bursa Malaysia, Boustead, whose portfolio includes oil palm plantation, real estate and financial services, said it was constantly exploring growth opportunities including M&As which would help it to enhance shareholder value.

The statement was made in response to The Edge weekly’s report that Boustead and its parent company Lembaga Tabung Haji were keen on buying the 65% controlling stake in Esso Malaysia Bhd from US-based Exxonmobil International Holdings Inc.

“The company (Boustead) will make an announcement to Bursa Malaysia Securities Berhad should there be any new developments in due course,” Boustead said.

However, in a separate statement Esso said that it was not “aware of any such M&A plans”.

The hardly traded Esso shares surged to near 13-year high of RM4.20 yesterday. The stock has gained 32% in the past two weeks from RM3.21 on March 23. It has gone up 53% since the start of the year.

Despite the share price rally, Esso shares are trading barely four times its historical price-earnings ratio (PER), compared with its peer Petronas Dagangan Bhd that is trading at a PER of 20.35 times.

Esso share price seems to have been in the doldrums since the onset of the 1997/98 financial crisis. The counter, which was once priced at above RM8 prior to the crisis, has been trading below RM4 over the past decade.

Should Boustead strike a deal at the current share price, it would be quite a good bargain, said analysts.

Esso owns 560 petrol stations including Mobil kiosks in the country besides its crude oil refinery in Port Dickson.

For FY10 ended Dec 31, Esso posted a profit of RM268.6 million from RM145.5 million the year before. The sharp rise on earnings was attributed to wider operating margin as the increment on product prices outpaced the increase in crude cost.

Boustead, under its unit Boustead Petroleum Marketing Sdn Bhd, already owns the petrol retailing business under the BHPetrol banner which has over 300 petrol kiosks in the country.

To recap, LTAT bought the remaining 70% stake in BP Malaysia Sdn Bhd from UK-based BP in 2004. The acquisition gave the army fund the full control of BP Malaysia.

BP Malaysia was then rebranded as Boustead Petroleum. LTAT had later sold the 70% stake thereby reducing its stake in BP Malaysia to 30%. The 70% was sold to Boustead.

The purchase had also given the buyer access to BP’s fuel terminal and two joint ventures in automated liquefied petroleum gas bottling plants.

This article appeared in The Edge Financial Daily, April 5, 2011.