Mahathir's son to expand shipping empire

The eldest son of Malaysian Prime Minister Mahathir Mohamad is to expand his shipping empire with a US$454 million acquisition of Hong Kong-based Pacific Basin Bulk Shipping.

Konsortium Perkapalan Berhad (KPB), a Kuala Lumpur-listed haulage company controlled and chaired by 37 year-old Mirzan Mahathir, intends to purchase 100 per cent of US-listed Pacific Basin pending approval from its shareholders.

The deal signals Mr Mirzan's intention to become an Asian shipping magnate but also reflects the Malaysian government's desire to bolster its shipping industry and heightens the increasingly intense maritime rivalry between Malaysia and Singapore.

The price tag comprises $230 million for the entire equity as well as $224 million for the purchase of outstanding debt. It is Mr Mirzan's intention to de-list Pacific Basin from Nasdaq if the deal goes ahead, although its head office will remain in the territory.

KPB has offered $16.22 a share, an 11 per cent premium to the last closing price of $14.50. The boards of both companies have signed commitments to vote in favour of the deal.

KPB is 72 per cent owned by Mr Mirzan and is the country's second largest haulage company, with a fleet of ships and lorries controlling approximately 25 per cent of the market.

It listed on the Kuala Lumpur stock exchange in January this year and stunned the market by trading at a 162 per cent premium to its issue price, a fact attributed to the company's immaculate political pedigree.