As the value of the company is tied to the performance of the company, it is in the interest of the warring shareholders to argue and fight outside the company.
KUALA LUMPUR: M&A Securities has advised shareholders to reject a mandatory general offer for shares in Ideal Jacobs (Malaysia) Corp Bhd, following an exercise to transfer majority ownership of the company to Widad Business Group Sdn Bhd.
At an extraordinary general meeting in January, shareholders of Ideal Jacobs had approved a proposal to acquire Widad Builders Sdn Bhd through a combination of RM110mil cash and the issuance of 1.78 billion new shares in Ideal Jacobs at 23 sen apiece.
Upon completion of the purchase, Widad Business Group will emerge with a 92.9% stake in Ideal Jacobs and trigger a mandatory offer for the remainder of the shares at a consideration price of 23 sen a share.
However, M&A Securities, which is an independent advisor to the offer, advised in a circular on Thursday that the offer price is too low based on the sum-of-parts-valuation method employed.
It said the offer price is "not fair" as it represents a discount of six to eight sen over the estimated fair value per Ideal Jacobs share of 28.68 to 30.6 sen as well as a discount of between seven to 26 sen to the historical market price of the shares.
Furthermore, it also advised the offer as "not reasonable" as the offerer intends to maintain the listing status of Ideal Jacobs on the Ace Market, and does not intend to compulsorily acquire any outstanding offer shares for which valid acceptances have not been received.
It noted also that holders who reject the offer will receive free warrants to benefit from any potential upside moving forward.
Limited time offer:
Just RM5 per month.
