PETALING JAYA: The Tang family which is seeking to buy out The Store Corp Bhd has secured acceptances giving them a total of 59% of the company’s equity, making their offer unconditional despite the share price closing higher than the price on the table.
This came after the company revised its buyout offer to RM3.70 a piece last Friday, from the original offer price of RM3.52 when it triggered the mandatory general offer on Nov 28.
It is noteworthy that The Store’s share price has risen above the buyout price, to close at RM3.75 yesterday.
On the face of it, this could indicate that some minority shareholders of The Store are holding out for a higher buyout price.
However, there were only a total of 17,400 shares traded.
Still, the fact that the share price has inched above RM3.70, does also indicate that the buyout is far from over as the offerors will need an acceptance level of more than 90% before the company is taken private. Shareholders have until 5pm on Jan 10, 2017 to accept the revised offer.
The RM3.70 offer is just more than half the value of The Store’s net asset value which stood at RM6.76 per share, as of Sept 30.
Most of The Store’s properties owned have yet to be revalued, as the most recent revaluation carried out on one of its properties was in 2010.
According to its 2015 annual report, the total net book value of The Store’s properties is RM423.8mil.
The group has had a lacklustre bottom line performance stemming from weak consumer sentiment.
For the financial year ended Sept 30, 2016 (FY16), The Store registered revenue and net loss of RM1.44bil and RM2.17mil.
To recap, The Store group managing director Tan Sri Tang Yeam Soon and his wife, executive director Puan Sri Khor Guik Lee made an initial mandatory general offer of RM3.52 a share, for the shares they do not own.
Following that, the share price rose to RM3.56.
Last Friday, The Store announced on Bursa Malaysia that it had revised the offer price to RM3.70.
The revised offer price translates to a payout of RM253.45mil by the Tang family.
Among the reasons stated by the Tang family as the rationale to take the company private include chanelling the administrative costs of maintaining the company’s listing status to the core business as well as gaining greater influence in determining the strategic decision of The Store.
The trading liquidity of The Store’s shares has been low, with an average monthly trading volume of 1,574 shares for the past 12 months.
Shareholders who have accepted the previous offer price are entitled to receive the revised offer price of RM3.70 per share.
On Nov 28, Tang and Khor, through TYS Consolidated Sdn Bhd, acquired an additional 13.88% stake in The Store, from Nirvana Asia Ltd founder Tan Sri Kong Hon Kong, triggering a mandatory general offer.
Tang and Khor, who have been long-time shareholders of The Store through Equatorial Century Sdn Bhd, acquired the stake at RM3.52 per share.
The Store’s chain comprises of 75 outlets in Malaysia, with 49 The Store Supermarket and Departmental Stores, nine Pacific Hypermarket and Departmental Stores in Peninsular Malaysia, and 17 Milimewa Superstores in Sabah.
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