my own personal ranking.
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Head of conglomerate YTL, Francis Yeoh went hunting for bargains when the markets crashed. He's not done shopping yet.
Francis Yeoh
During the height of the equity markets, Francis Yeoh sat restlessly on the sidelines watching rivals bid up prices. When Singapore's Temasek decided to unload three of its power-generating firms last year, Yeoh, whose YTL Corp. is one of Southeast Asia's biggest power companies, made offers he thought were fair. But he initially lost out, first in March 2008 to China Huaneng Group and then four months later to Japan's Marubeni ( MARUY.PK - news -people ).
It was a tough time for Yeoh. "You don't know what kind of pressure I had before," says the 55-year-old scion, as he sits in his penthouse office overlooking YTL's Ritz-Carlton in Kuala Lumpur. His father, billionaire Yeoh Tiong Lay, founded YTL as a construction firm in 1955, but Francis took over daily operations two decades ago, transforming it into a $3.4 billion (market cap) multinational conglomerate. "When I had $3.8 billion in cash, a lot of people, especially fund managers and analysts, criticized me," says Yeoh, "They said: 'We can't recommend your stock because you have so much cash and you don't know what to do with it.'"
But Yeoh, who is known for his flamboyant lifestyle, including his two helicopters, a private island and famous friends such as the late Luciano Pavarotti, is prudent in business. "I could not buy assets that were two or three times the market value," he says, despite the fact that hedge funds and private equity players were paying those prices.
Yeoh must have been one of the few businesspeople in the world who was relieved when the markets collapsed. He could finally go shopping: In October YTL paid $180 million in cash to buy control of Macquarie Prime Real Estate Investment Trust and its holding company, paying 49% of net asset value. Renamed Starhill Global REIT, it includes two shopping malls on Singapore's busy Orchard Road, Wisma Atria and Ngee Ann City.
Then in late November Temasek shelved the auction of PowerSeraya, Singapore's second-largest power generator, because of unfavorable market conditions. Days later it privately called Yeoh to negotiate. Within a week subsidiary YTL Power agreed to pay $2.4 billion in stock and debt, or ten times Ebidta. When the sale was finalized in March, Yeoh, who converted to Christianity at age 16 and is deeply and overtly religious, issued a press release thanking "our Lord Jesus for blessing us with stewardship of this important asset."
Divine intervention not withstanding, the latest purchase strengthens YTL's standing as a leading power supplier. "This puts us in a very strategic position to win more power assets globally, especially with our large cash reserves," says Yeoh, who favors utilities because of the typically long-term concessions and steady profits. The conglomerate now gets 60% of its $2 billion sales from such assets.
The deals also illustrate Yeoh's tendency to preserve cash during boom times so he can spend during downturns. "YTL thrives in times when acquisition opportunities are aplenty at reasonable valuations," says Bernard Ching, associate director of ECM Libra Research. "We expect YTL to pounce on a few assets before this recession is over." One thing you won't probably see is a sale: an eager buyer at the right prices, YTL is a reluctant seller in any market.
Investors seem pleased. Net profit more than doubled in the third quarter ending Mar. 31, following the consolidation of the results from the two acquisitions. The stock is down 7% for the year--outperforming the Kuala Lumpur Composite Index, down 21%--but it is up 27% since September. Francis' father, who controls 53% of YTL's shares, is again Malaysia's seventh richest, worth $1.8 billion, despite dropping $300 million in the past year.
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