Karambunai up as much as 9% after close of takeover offer

KUALA LUMPUR (June 10): Karambunai Corp Bhd (KCB) rose as much as 0.5 sen or 9.09% to 6 sen today, after the close of the unconditional voluntary take-over offer from Tan Sri Dr Chen Lip Keong yesterday, which saw 78.26% of its shareholders agreeing to the offer.
 
However, at 3.22 p.m., KCB's shares gave up gains to trade at 5.5 sen, after 16.88 million shares exchanged hands. It was the 13th most active stock of the day.
 
However, KCB’s structured warrant (KBUNAI-WC), which also saw active trades today — it was the 9th most active counter — was still up half sen or 33.33% at 2 sen, after 28.49 million shares were done.
 
Dr Chen, who had 68.46% in KCB, made the privatisation offer on April 28 at 5 sen per share and 2 sen per warrant. Chen had no intention of maintaining the listing status of Karambunai.
 
However, independent adviser Inter-Pacific Securities had advised KCB's minority shareholders on May 20 to reject Dr Chen's offer, citing though it can be deemed reasonable, it was "not fair" and that the unfairness substantially outweigh the reasonableness of the offer.

It had gone on to explain that KCB's offer price of 5 sen represented a discount of about 76% to the revalued net asset value (RNAV) per Karambunai share of 21 sen.

It had also noted that the 2 sen per warrant share was a discount of near 40% over the theoretical value of the warrants of 3.31 sen.

At the close of offer yesterday, the offeror held 78.26% in the company and controlled 45.24% of its warrants.

KCB, which is principally engaged in property development and construction activities, as well as leisure and tourism in Sabah, including hotel resort and golf course, has gained 22.22% year-to-date. — theedgemarkets.com

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