Milux minorities advised to reject takeover offer

KUALA LUMPUR: Interpac Securities Sdn Bhd advises Milux Corporation Bhd minority shareholders to reject the takeover offer from Topspike Holdings Sdn Bhd and Asia New Venture Capital Holdings Sdn Bhd (ANVCHSB) at 80 sen per share.

Interpac Securities, which is the independent adviser, said the offer was not fair and not reasonable and recommended the minority sharehodlers of Milux, which manufactures of gas cookers, electrical household appliances, to reject the offer.

On May 3, Topspike and  ANVCHSB had acquired 25.48 million shares or 46.83% in Milux via direct business transactions.

Datuk Wira Ling Kah Chok and Gan Boon Lay are shareholders of Topspike while ANVCHSB is a unit of Asia Capital, a private fund company.

Interpac Securities said the two companies had on May 6, further purchased 6.18 million Milux shares or about 11.37% for 80 sen a share or RM4.95mil.

“The offer for Milux shares was not fair as the offer price of 80 sen a share was a discount of 14 sen or about 14.9% to the realised net asset value of 94 sen per Milux share.

“The offer price was a premium ranging from 2.7% to 11.42% over the five, day, one month, thre month, six month and 12 month volume weighted average market price of the shares. The offer price was a discount of 0.62% of the closing market price of Milux shares,” it said.

Interpac Securities also viewed the offer was not reasonable after as the joint offerors intend to maintain the listing status. It added while trading was illiquid, the holders could still dispose of their shares in the open markets after the closing date of the offer.

It also said the non-interested directors had also advised the minority shareholders to reject the offer.

To recap, Milux owns a Malaysian-based internationally recognised brand involved in the manufacturing and distribution of various household appliances.

“It recorded losses for the past three financial years up to Dec 31, 2018 and the three-months ended March 31, 2019.  Furthermore, it has a cumulative negative cash flow.

“Milux Group was not spared from pricing pressure for its products due to stiff competition for both its export and local market. 

“Moreover, rising wages had increased its manufacturing costs which Milux Group is unable to pass the increased costs to its buyers due to stiff competition,” Interpac Securities said.