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ILB shares rise on talk of M&A move

STARBIZ, WEDNESDAY, 11TH JULY 2007

By: Yvonne Tan

PETALING JAYA: Shares in warehousing and logistics company Integrated Logistics Bhd (ILB) added 10 sen to a fresh one-month high of RM1.84 yesterday on market talk that a merger and acquisition (M&A) - related deal was in the works at the company, an analyst said. 

He said the M&A could be significant for the company and that it may involve a related business. 

“When it (M&A) materialises, it would mark the company's foray into a 'high-growth' area,” he told Starbiz yesterday. 

Some 2.2 million ILB shares changed hands yesterday. 

Meanwhile, a report by a local bank-backed brokerage noted that the company was poised to enjoy the “bright prospects” of the logistics solutions outsourcing market in China. 

It said ILB had a niche strength of operating one of the world's most advanced supply chain management systems, called “Vendor Managed Inventory”, to support the production of Lenovo/IBM's ThinkPad laptops and IBM's servers at its warehouses in China. 

ILB's earnings will be driven mainly by its four new overseas warehouse projects, which are expected to start contributing to profits from the second half of the year ending Dec 31, 2008, the brokerage added. 

Three of the projects are located in China and one is in Dubai.  

China currently contributes about 70% to the group's bottom line. 

The brokerage noted that the positive developments and news flow would lift ILB's share price going forward, thus “propelling” the performance of the “undeserved laggard”.