The independent board of Tecnic Group concurred with the independent adviser Mercury Securities Sdn Bhd that the offer as “not fair” and “not reasonable” and advised these minorities to reject the offer.
The directors of the plastic product manufacturer who made the advice comprised of Datuk Gan Kim Huat; Gan Poh San; Gan Chia Siang; Ng Wan Cher @ Ng Guan Cher; Tan Jing Pho; Teo Chee Kok; Tan Sri Hussin Ismail and Amirul Azhar Baharom
StarBiz reported on Jan 13 that the takeover was led by prominent businessman Tan Sri Wan Azmi Wan Hamzah. The unconditional mandatory general offer (MGO) was from the joint offerers – RE Holdings; Wan Azmi and his wife Puan Sri Nik Anida Nik Manshor; George Sia and Chan Liew Hoon.
The MGO was pursuant to a reverse takeover (RTO) deal that had started in September 2015. In the exercise, RE Holdings had offered to sell its entire equity interest in Rohas-Euco Industries Bhd (REI) for RM200mil to Tecnic to be satisfied via the issuance of 317.5 million new 10 sen shares in Tecnic at 63 sen apiece. The RTO deal effectively gives RE Holdings an 88.7% stake in Tecnic.
The RTO deal effectively gives RE Holdings an 88.7% stake in Tecnic.
In the independent advice circular's executive summary issued on Monday, Mercury Securities said based on the discounted cashflow (DCF) valuation, it had derived the fair value for Tecnic between RM250.43mil to RM271.77mil, representing 70 sen to 76 sen per Tecnic Share.
“The offer price of 63 sen was a discount of seven sen (10.00%) to 13 sen (17.11%) to the abovementioned range of fair values per Tecnic share.
“The offer price is lower than the closing market prices of the Tecnic shares for approximately 95% of the total market days since the announcement of the MoU on Sept 21, 2015 up to the last practical date (LPD).
“The offer price represents a discount of up to 25.22% over the five-day, one-month, three-month, six-month and one-year colume weighted averag prices (VWAPs) of the Tecnic shares up to the Notice last trading date.
“In view that the offer price is lower than the value of the offer shares and the closing market prices of the Tecnic Shares for approximately 95% of the total market days since the announcement of the MoU on Sept 21, 2015 up to the LPD, the offer is not fair,” said Mercury Securities.
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