Malaysia's Gamuda may be taken private - paper

KUALA LUMPUR, July 5 (Reuters) - Malaysian builder Gamuda Bhd (GAMU.KL) may be a buyout target after its market value fell by more than half this year due to a weak industry outlook, a newspaper reported on Saturday.

A group of investors led by a Middle Eastern fund had been working on a deal to take the $1.39 billion company private, Malaysian financial Weekly The Edge reported, citing sources.

"If things pan out, there should be some developments in a month or two," the financial newspaper quoted an unidentified source as saying.

A Gamuda spokesman neither confirmed nor denied the report when contacted by telephone in Kuala Lumpur.

Gamuda shares were last traded at 2.27 ringgit ($0.695). The stock has lost 53 percent of its value since the beginning of the year.

Gamuda is the contractor for a $3.83 billion railway project in Malaysia. It also owns some of the busiest toll highways in the country, including Lebuhraya Damansara-Puchong, an intra-urban expressway.

The royal family of northern Perak state, through unlisted Generasi Setia (Malaysia) Sdn Bhd, controls a 7.52 percent stake in Gamuda.

Australian investment firm Platinum Investment Management Ltd was the second-largest shareholder with a 7.48 percent stake.

Last month, Gamuda formalised the employment of its managing director Lin Yun Ling by signing a five-year contract with him.

Lin, who founded the company and still owns a 1.73 percent stake, stunned investors in February when he sold 70 million shares in the company, fuelling talk that he could soon exit the firm. ($1=3.266 Malaysian ringgit) (Reporting by Soo Ai Peng; Editing by Ben Tan)