PETALING JAYA: Analysts are deeming the proposed privatisation of DKSH Holdings (M) Bhd
by its parent company DKSH Resources (M) Sdn Bhd, a fair and attractive offer.
DKSH Resources, which controls a 74.3% stake in DKSH Holdings, submitted the privatisation proposal via a selective capital reduction and repayment (SCR) exercise at an offer price of RM6.15 per share.
Hong Leong Investment Bank (HLIB) Research, which has recommended shareholders of DKSH Holdings to accept the privatisation proposal said: “This offers a fair and attractive exit with a 16.7% premium to the last traded price and up to 24% over various longer-term volume-weighted average price benchmarks.”
Given the stock’s very low liquidity, volatile operating conditions, and DKSH Resources’ clear intention to delist the company, the research house said: “We view the SCR as a timely opportunity for shareholders to realise value at a premium.”
Under the proposal, all minority shareholders will be entitled to receive the cash consideration, while the non-entitled shareholders will waive their rights.
Following the SCR and cancellation of the repurchased shares, DKSH Holdings will become a wholly-owned subsidiary of DKSH Resources and will be delisted from Bursa Malaysia.
Despite stable operations, HLIB Research said shares of DKSH Holdings have long suffered from extremely low trading liquidity, averaging only about 48,000 shares per day over the past three years, equivalent to just 0.12% of free float.
This has historically limited shareholders’ ability to exit positions at fair value.
“The SCR provides a rare opportunity for minorities to monetise their holdings in full at a guaranteed premium without being constrained by market depth or price volatility,” the research house said.
HLIB Research said it lowered its fair value on DKSH Holdings to RM6.15 per share from RM6.95 previously, aligning with the latest offer price given the high likelihood of privatisation.
