KUALA LUMPUR (April 26): The mandatory takeover offer by Amazing Parade Sdn Bhd for shares in Eastern & Oriental Bhd (E&O) has been deemed “not fair and not reasonable” by the independent adviser BDO Capital Consultants Sdn Bhd (BDO CC).
Amazing Parade, which is owned by Kerjaya Prospek Group Bhd co-founders Datuk Tee Eng Ho and Tee Eng Seng, on March 26 proposed to acquire the remaining 820.08 million shares or 57.29% stake it does not own in E&O for 60 sen apiece.
This follows a share sale agreement for Amazing Parade to acquire 10.89% in E&O from Sime Darby Bhd for 60 sen apiece or RM93.5 million — thus bumping up the former’s stake in the property outfit.
In a circular to E&O shareholders filed today, BDO CC pointed to the offer’s “significant discount of RM1.52 or 71.7% to the estimated fair value per E&O share of RM2.12”.
It also noted that the offerors intend to maintain E&O’s listing status, and how they do not intend to acquire remaining offer shares for which valid acceptances have not been received before the closing date even if the conditions stipulated in Section 222(1) of the CMSA are fulfilled.
“We are of the view that the offer is not reasonable as E&O shares will remain tradable on the Main Market of Bursa Securities and hence, the holders will still have the opportunity to realise their investment in E&O shares at the prevailing market prices in the open market after the closing date (although there is no assurance that E&O shares will continue to trade at the current price levels and trading volume after the closing date),” it said.
“Based on the above, BDO CC is of the view that the offer is not fair and not reasonable.
Accordingly, we advise and recommend that holders reject the offer,” BDO CC said.
Concurrently, E&O’s non-interested directors also concurred with BDO CC’s recommendation, and recommended shareholders to reject Amazing Parade’s offer.
Shares of E&O closed up half a sen or 0.83% at 60.5 sen at noon market break, valuing the group at RM881.45 million.
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