THE share price of Pantai Holdings surged 19 sen to a day's high of RM1.97, a 52-week high, before easing off to close with a gain of 11 sen at RM1.89 yesterday.
At the same time, its warrant, Pantai-wa, climbed to a day's high of RM1.02, also a 52-week high, before it came off to close with a gain of 4 sen at 95 sen.
Both stocks were actively traded. Pantai-wa was the most active stock with a volume of 22.7 million warrants while Pantai saw 11.4 million shares changing hands.
This flood of volume could have arisen due to market talk that Singapore's Parkway Holdings Ltd would make a general offer (GO) for the rest of the Pantai shares that it does not already own. This was speculated on by a newspaper recently.
Sources close to Pantai, however, told StarBiz yesterday there will not be a GO from Parkway.
Parkway had recently purchased a 31% stake in Pantai, just short of the 33% threshold that would have made a GO mandatory. The highest price Parkway paid was RM2.45 for the Pantai shares and RM1.33 for the warrants. If a GO were an obligation, it would have to make a general offer at these prices.
Following the acquisition, five Pantai directors have resigned. There were a total of seven board members according to its annual report last year.
The directors who have resigned were replaced by three senior Parkway executives, a director from Newbridge which controls Parkway, and an independent Malaysian director.
There is a practice note (2.4), associated with the Malaysian Code on Take-overs & Mergers, which states that the Securities Commission can require an acquirer to make a GO if it buys a stake of more than 20% and changes half the board.
For that note to apply, however, the acquirer must have bought the shares from a shareholder who held a stake of at least 33%.
In Pantai's case, its CEO, Datuk Lim Tong Yong, who sold part of that 31% stake bought by Parkway, had not owned a stake of 33%. As such, Parkway is not legally obliged to make a GO.
Some ordinary investors, however, might have viewed it as a case of a takeover by Parkway, which is now by far the single largest shareholder of Pantai.
In addition, Pantai's board now comprises mainly representatives of Parkway and Newbridge. Even so, Parkway is technically not obliged to make a GO.
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