(AFP) The government denied speculation today that it would raise its offer to take over construction giant United Engineers Malaysia (UEM).

The government announced a RM3.8 billion bid to takeover UEM last week as the first step towards tackling its biggest corporate headache Renong Bhd and wooing foreign investors back to the stock market.

Renong, which once enjoyed political clout as the investment arm for Prime Minister Dr Mahathir Mohamad's ruling party, has some RM13 billion in outstanding group debt.

The government investment vehicle handling the takeover, Syarikat Danasaham, has offered to buy UEM at RM4.50 a share. UEM has a 32.6 percent stake in Renong, which in turn has a 37.9 percent stake in UEM.

Danasaham issued a statement today rejecting market talk that it would make the bid more attractive by giving minority shareholders proceeds from the sale of land owned by Prolink, a unit of Renong.

"We will not be revising the offer price of RM4.50 nor offer additional consideration to UEM minority shareholders," it said.

No discrimination

The sale of 1,000 acres of Prolink land being held by UEM in trust for minority shareholders was already calculated into the offer, it said.

The takeover offer was being made to all UEM shareholders at the same price without discrimination, it added.

Some analysts have said that the government's offer may not be attractive to some UEM minority shareholders who paid a higher price for their stake before the 1997/98 financial crisis.

The offer by Danasaham, a unit of government investment arm Khazanah Nasional Bhd, hinges upon receiving at least 90 percent acceptance.

Officials said the takeover was a prelude to the restructuring of the Renong group.

If the takeover offer is successful, UEM will be delisted from the stock exchange. Renong has interests in banks, toll roads, oil and gasfields and real estate.