Proton shares up 13% or 90 sen on talk of VW deal

Proton Holdings Bhd's share price soared 13.14% or 90 sen to close at RM7.75 on Jan 26 on speculation that the government had brokered a deal with German carmaker Volkswagen AG (VW) to take up a 51% stake in Proton’s manufacturing arm.

The counter traded between RM6.70 and RM7.80, its highest in 13 months, with a total of 2.32 million shares exchanging hands.

A news wire report said the government had completed a deal with VW, just a day after the Malaysian Automotive Association had announced Proton’s car sales dropped 30.4% in 2006 to 115,538 units from 166,188 units in 2005.
DRB Hicom Bhd, which has also made a bid to take up a stake in Proton, was one of the most actively traded counters. It closed 5.26% or 10 sen higher at RM2 with 24.93 million shares traded.
When contacted, officials from Khazanah Nasional Bhd, Proton and DRB-Hicom denied knowledge of the government completing the deal with any party.
It has been reported that VW, PSA Peugeot-Citroen, General Motors Corp, DRB-Hicom and the Naza Group have made proposals to the government to take up a stake in the ailing national carmaker.