KUALA LUMPUR: Rengit Capital Sdn Bhd's takeover offer for Leweko Resources Bhd at 18 sen a share is not fair but reasonable, independent adviser UOB Kay Hian Securities (M) Sdn Bhd said on Monday.
In its independent advice to minority shareholders of Leweko, which is involved in property developer and precast concrete, UOBKH said they should accept the takeover offer.
On June 28, Rengit Capital had acquired a 50.47% stake in Leweko and this triggered an unconditional mandatory take-over offer for the remaining stake. It had also acquired 93.58% of the warrants.
It then made a cash offer of 18 sen per share and one sen per warrant. However, it intends to maintain the listing status on the Main Market of Bursa Securities.
UOBKH said Leweko shares and warrants were relatively illiquid and the average monthly trading volume-to-free-float of the shares and warrants was just 0.94% and 2.50% respectively.
“Holders may have limited opportunities or it may require a longer time for holders to dispose their offer securities in the open market after the closing date.
“In the absence of a competing offer, the offer provides an opportunity to the holders to realise their investments in Leweko at the share offer price and warrant offer price
“The offer is reasonable as it provides an exit opportunity to the holders, especially those holding large blocks of offer securities to realise their investment,” it said.
UOBKH said based on the above factors and its evaluation, the offer was not fair but reasonable. It recommended the minority shareholders accept the offer.
The non-interested directors also concurred with UOBKH's recommendations that the offer was not fair but reasonable and recommended they accept the offer.
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