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Unisem major shareholders in a dilemma


Securing buyers: John Chia and the other major shareholders will have to either convince Bursa Malaysia to give the company time to rectify the shortfall in the public spread, or find a party that is willing to take up the stake at a favourable price.

Securing buyers: John Chia and the other major shareholders will have to either convince Bursa Malaysia to give the company time to rectify the shortfall in the public spread, or find a party that is willing to take up the stake at a favourable price.

WHILE the founders of Unisem (M) Bhd , together with a few China-based buyers, have been successful in their bid to gain majority control of the company, there may be another stumbling block ahead.

The new major owners of Unisem, which now collectively hold a 83.13% stake, may face difficulty in selling down their shares to maintain the required 25% public shareholding spread of the company.

The major shareholders, which include the company’s founder John Chia, his son Alexander Chia, their China-based partners Tianshui Huatian Technology Co Ltd and Tianshui Huatian Electronics Group Co Ltd, will need to sell down their stake to comply with Bursa Malaysia requirements.

However, with the stake having been acquired at RM3.30 per share, this may not be easy.

The 12-month consensus target price of Unisem stands at RM3.05, based on Bloomberg data, and analysts mostly have “sell” and “hold” calls on the counter, indicating that it would not be wise move to accumulate the stock at this point.

Making things worse is that the share price fell 4.6% over the last week, closing at RM3.11 on Friday.

To recap, the first announcement on the takeover offer was made on Sept 12 last year, with the parties having offered to take over the company for RM1.817bil.

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Corporate News , unisem