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OSK Holdings Bhd’s offer to takeover PJ Development Holdings Bhd (PJD) is deemed “not fair but reasonable”, according to independent advisor MIDF Investment Amanah Bank Bhd, and shareholders and warrant holders are recommended to accept the offer.
KUALA LUMPUR (Sept 30): OSK Holdings Bhd’s offer to takeover PJ Development Holdings Bhd (PJD) is deemed “not fair but reasonable”, according to independent advisor MIDF Investment Amanah Bank Bhd, and shareholders and warrant holders are recommended to accept the offer.
However, shareholders and warrant holders are recommended to accept the offer.
The group had previously offered to acquire shares in PJD for RM1.56 per share and 60 sen per warrant.
In an independent advice circular, MIDF said based on its several evaluations, it noted that the share offer price of RM1.50 is at a range of premium between 0.67% to 11.94% to the volume weighted average price (VWAP) during the various periods under review, prior to the Notice; and at the five (5)-day VWAP up to and including Sept 23, being the latest practicable date before the posting date of this independent advisor circular (LDP) and the closing price of PJ Development Shares on the LPD of RM1.50.
“However, the share offer price of RM1.50 represents a discount of 28.23% compared to the revised net asset value (RNAV) per PJD share of RM2.09. As such, the share offer price is ‘not fair’,” the independent advisor wrote.
MIDF also said the warrant offer price of 50 sen is “not fair”.
The independent advisor noted that the offer price is at a range of premium between 6.38% to 31.58% to the VWAP and at a premium of 16.28%, compared with the theoretical value of the warrants of 43 sen, but it is at a discount of 54.13% to the see-through value based on the RNAV of PJ Development shares.
Meanwhile, MIDF is of the view that the offer is “reasonable” in view that the monthly trading volume over the free float for PJD shares and warrants is on a decreasing trend for the past one year up to July 2016.
“In respect of the offer shares, the average monthly trading volume (excluding outlier) of 0.84% over the free float of PJD shares for the period 12 months under review is considered to be relatively less liquid, compared to the average trading liquidity of Bursa Malaysia Property Index over the free float of 6.39%.
MIDF also said upon expiry of five market days from the closing date of the offer, Bursa Securities shall immediately suspend trading of securities of PJD, as it is not the offeror's intention to maintain the listing status of PJ Development, and the offeror will procure PJD to take the requisite step to withdraw its listing status
Also, the independent advisor said the board has also confirmed that PJD has not received any other offer for its PJD shares or its business, assets and liabilities; and the offeror will be in a position to influence the outcome of the ordinary and special resolutions, which require shareholders’ approval.
“We wish to highlight that should the company be delisted, it is likely to be difficult for Holders who do not accept the Offer to sell their PJ Development Shares or Warrants, in the absence of a public market for the PJD shares or warrants,” it said.
OSK had launched its takeover offer for shares in PJD which it does not own for RM1.50 per share and 50 sen per warrant, after failing to cross the 90% shareholding threshold to take PJD private.
The group had previously offered to acquire shares in PJD for RM1.56 per share and 60 sen per warrant, and had ended up with a total shareholding of 89.29%, just below the threshold.
OSK has already acquired a total of 472.23 million PJD shares, representing 90.11% of the latter's issued and paid-up share capital; and 99.62 million warrants, representing 70.61% of the total outstanding warrants, as at the closing of its unconditional voluntary takeover offer for PJD shares on Sept 5. — theedgemarkets.com
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