Malaysia's Selangor state still in water buyout talks

KUALA LUMPUR, July 1 (Reuters) - A state in central Malaysia is still in talks with Splash and Syabas for its plan to take over their water operations, said its chief minister on Wednesday.

Earlier this week, two of the four water operations in Selangor state rejected the state government's bid to buy out their operations.[ID:nKLR91595]

Puncak Niaga (PNHB.KL) and Splash, in which builder Gamuda (GAMU.KL) owns a 30 percent stake, said Selangor's offer, which was based on one-time book value of their assets, were unacceptable.

Meanwhile, Puncak's 70 percent owned unit Syabas, another major player in the state's water industry, said it could not decide on the offer because the federal government's prior consent was required on that matter.

Abass, owned by Kumpulan Perangsang (KPSB.KL) which is in turned controlled by the Selangor state government, is the only water concession that accepted the offer.

But Selangor said it is still talking with Splash and Syabas on the buyout plan and it is optimistic about the outcome.

"The state government is in the midst of resolving an oustanding issue on sub-contracts with Splash, whilst Syabas is awaiting the formal blessing of the federal government to respond to the state's offer," said Selangor chief minister Khalid Ibrahim.

"To date, only Puncak Niaga has conclusively rejected the state's offer. However, this development will not derail the state government's restructuring efforts," he said in a statement.

(Reporting by Soo Ai Peng; Editing by Niluksi Koswanage)