KUALA LUMPUR: Pimpinan Ehsan Bhd has cancelled its proposals to undertake a capital repayment and delisting.
In a statement on Monday, the construction company said the board had decided to terminate the proposals as it intends to acquire a new core business to regularise its condition as a cash company pursuant to Paragraph 8.03(1) of the Listing Requirements.
“The termination of the proposals is not expected to have any material effect on the earnings and net assets per share of the company for the financial year ending Dec 31,2021, ” it said.
Trading was voluntarily suspended on Monday pending the release of material announcements.
It was last traded at RM1.64.
On March 22, independent adviser TA Securities and the independent directors of Pimpinan Ehsan advised minority shareholders to reject the takeover offer of RM1.07 a share.
The independent directors concurred with TA Securities that the offer was unfair and advised them to reject the offer by Pitahaya (M) Sdn Bhd.
On Feb 19, Pitahaya acquired 45.28 million shares or 65% in Pimpinan Ehsan for RM48.46mil or RM1.07 a share via direct business transactions and it extended an unconditional mandatory takeover offer to acquire all the other shares.
TA Securities said based on the asset-based valuation approach, the offer price is higher than and represents a premium of about 4.9% over the unaudited net asset per share as at Dec 31,2020 of RM1.02.
The offer price is seven sen over the Pimpinan Ehsan’s traded market price on the last trading day prior to the serving of the notice on Feb 18 and a premium of between 7.81 sen and 11.15 sen over the five-day, one-month, three-month, six-month and one-year volume weighted average prices (VWAPs) of Pimpinan Ehsan shares up to the last trading day.
“The offer price represents a discount of 57 sen (34.76%) and 59.7 sen (35.82%) over the last traded market price of Pimpinan Ehsan shares on March 15, the latest practicable date and the five-day VWAP of Pimpinan Ehsan shares up to the latest practicable date respectively, ” it said.
TA Securities said the offer is not fair in view that although the offer price is higher than the estimated value and market prices of Pimpinan Ehsanshares up to the last trading day, it is lower than the market prices of Pimpinan Ehsan shares after the last trading day and up to the latest practicable date.
It also said the offer is not reasonable as Pimpinan Ehsan shares will remain tradable and hence, the holders will still have the opportunity to realise their investment in Pimpinan Ehsan shares at the prevailing market prices in the open market after the closing date.
However, its caveat was that there was no assurance Pimpinan Ehsan shares will continue to trade at the current price levels and trading volume after the closing date.
“Holders of the offer shares should note that the market prices of Pimpinan Ehsan shares have been trading above the offer price since notice up to the latest practicable date.
“TA Securities is of the view that the historical market prices of Pimpinan Ehsan shares after notice up to the latest practicable date would serve a more meaningful reference of the market prices of Pimpinan Ehsan shares to be used as part of its evaluation of the offer as it is reflective of the current value of Pimpinan Ehsan shares.”