Takeover offer below fair value

Can-One products

KUALA LUMPUR: The independent directors of Can-One Bhd have advised minority shareholders to reject the takeover offer of RM2.50 a share as it is sharply below the fair value of RM9.77 a share.

In the circular to minority shareholders yesterday, the independent directors concurred with independent adviser Public Investment Bank that the takeover offer is “not fair” and “not reasonable” and recommended they “reject” the offer.

In the executive summary, the board said the estimated fair value of Can-One is RM1.87bil or RM9.77 per Can-One share.

“The offer price of RM2.50 per Can-One share is lower than the estimated fair value of Can-One share which represent a discount of RM7.27 or 74.41% over the estimated fair value per Can-One share, ” it said.

The independent board said based on the assessment of the offer price “we are of the opinion that the offer is not fair”.

As for the reasonableness of the offer, it said although the Can-One shares are relatively illiquid, the offer price of RM2.50 is a discount ranging from 13.10% to 20.26% over the last traded price of Can-One shares as at the last trading date (LTD) at May 3, and the five-day, one-month, three-month, six-month and one-year volume weighted average market price (VWAMP) of Can-One shares up to the LTD.

It said as the offeror intends to maintain the listing status, the holders will still be able to participate in the trading of Can-One Shares after the closing date.

On May 4, Can-One received an unconditional mandatory takeover offer at RM2.50 per share from its director Yeoh Jin Hoe (pic, above) and persons acting in concert with him (PACs).

Eller Axis Sdn Bhd had entered into an unconditional share sale agreement with Genkho Candoz Sdn Bhd to buy a 20.94% stake in Can-One for RM100.6mil or RM2.50 per Can-One share.

Can-One is involved in the manufacture of metal and lithographed cans, plastic jerry cans, bag-in-boxes, and the manufacture, packaging and distribution of dairy and non-dairy products.

Before the deal, Yeoh who owns 95% of Eller Axis had a 3.91% stake in Can-One, while Eller Axis owns 23.73% and the PACs held another 11.99%.

After the deal, Yeoh, Eller Axis and the PACs will see their collective stakes in Can-One rising from 39.63% to 60.57%, and as such, they were obliged to extend an unconditional mandatory take-over offer to acquire all the remaining Can-One Shares which are not already held by them.

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