KUALA LUMPUR: Minority shareholders in TA Enterprise Bhd (TAE) should accept Datuk Tony Tiah Thee Kian buyout offer, as it is higher than the company's prevailing price in the stock market.
The buyout is also a chance for investors to exit the stockbroker and avoid the risk of holding shares in a "illiquid" counter, despite its cheap valuation.
"Holders who choose not to accept the offer may continue to hold their TAE Shares and will have the opportunity to dispose their TAE Shares in the open market at the prevailing market prices, which can be higher or lower than the Offer Price, as long as TAE shares remain listed," DWA Advisory Sdn Bhd said.
"However, in view that currently TAE is not in compliance with the public spread requirement, the offeror may request TAE to make the necessary application to withdraw TAE’s listing status," it added.
Tony Tiah, who controls 77.7% of TAE shares, is offering 65.5 sen a share to buyout the remaining minority shareholders in the company he founded.
The stock was last traded at 65 sen on Thursday.
While the offer was at a premium to market prices, DWA Advisory viewed the offer as "not fair" because of it was at a significant discount to the TAE break down valuation of between RM2.25 and RM2.26 a share.
However, after taking consideration of the stock's historical performance, DWA Advisory viewed the offer as "reasonable."
The firm also said TAE's independent directors have also concurred with its recommendation to minority shareholders to accept the offer.
TAE has received an unconditional takeover notice from Tony Tiah on Dec 14 after his stake in the company had increased from 42.36% to 59.82%.
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