The independent adviser Mercury Securities and Wing Tai's non-interested directors had concurred the minorities accept the offer although it was not fair based on the fair value basis but seen as reasonable as it is illiquid.
Based on the sum-of-parts valuation (SOPV) method, Mercury Securities derived a range of estimated fair value for the entire equity interest in Wing Tai of RM1.688bil to RM1.708bil or a fair value of RM3.55 to RM3.59.
Mercury Securities said the offer price was a discount of RM1.75 to RM1.79 or 49.30% to 49.86% over the range of estimated fair value per share, hence the offer was not fair.
The independent adviser said the “reasonable” view outweighed the “not fair” view as the offer price was higher than the daily volume weighted average market prices (VWAMPs) of the shares for 99% of the total market days over the past one year up to the last practical date.
It explained the offer price was 61.75% above the average daily VWAMP of the shares over the past one (1) year up to the LPD of RM1.1128,
It also said as the shares were illiquid, the offer provided an exit opportunity to the minority shareholders to realise their investment.
Wing Tai's non-interested directors comprising Datuk Ghazi Ishak; Dr Poh Soon Sim; Siew Kah Toong and Tan Sri Dr Zulkurnain Awang had also concurred with the evaluation and recommendation of Mercury Securities that the offer is “not fair but reasonable”. They recommended the minorities accepted the offer.
The Cheng family of Singapore's unconditional cash offer, valued at a total RM290.7mil, was made through Singapore-listed Wing Tai Holdings Ltd (WTH) and its unit Wing Tai Investment & Development Pte Ltd (WTID), both of which are controlled by the Cheng family.
Through WTH and WTID, the Cheng family directly owns a 66.1% stake in Wing Tai.
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