Shell Refining board tells minorities: Reject Malaysia Hengyuan offer

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KUALA LUMPUR: The board of Shell Refining Company (Federation of Malaysia) Bhd and the independent adviser have advised the minority shareholders to reject the takeover offer from  Malaysia Hengyuan International Ltd.

Independent adviser AmInvestment Bank said on Thursday the offer price of RM1.92 per offer share was not fair as it was 53.8% to 59.6% below the range of fair value per share based on discounted cashflow (DCF) valuation of between RM4.16 and RM4.75 per share.

It also said the offer was a 61.13% to 65.76% below  the closing market price as well as historical volume weighted average price (VWAP) of the shares up to the acquisition announcement, which ranged from RM4.94 to RM5.6082.

AmInvest added it was 7.72% to 47.73% below the closing market price as well as historical VWAPs Refining shares up to the notice’s last trading date ranging from RM2.3334 to RM3.6735,” it said.

“Based on the DCF valuation, the equity value attributable to each SRC Share ranges from approximately RM4.16 to RM4.75,” it said. 

Shell Refining's board (except for the interested directors) also concurred with the independent adviser's recommendation.

It said the offer was not fair and not reasonable and “recommends that holders of offer shares reject the offer”.