AP Land EGM adjourned on discrepancy

RAWANG: Asia Pacific Land Bhd's (AP Land) EGM ended mid-way on Tuesday, Oct 25 following a discrepancy in the company's circular to shareholders, pertaining to the proposed offer from 34%-owned shareholder Low Yat Holdings Sdn Bhd (LYH) to buy all the assets and liabilities of AP Land for RM305.2 million or 45 sen per share.

Shareholders will have to meet again on Nov 8 to decide if they want to accept the offer made on Jan 11 this year, once corrections have been made.

The discrepancy stems from an inconsistency between AP Land audit committee's findings and the directors' recommendation.

The audit committee found the offer price to be a reasonable premium on the last transacted price on Jan 10 but agreed with independent adviser MIDF Amanah Investment Bank Bhd that from a financial point of view the deal was "not fair" due to the large discount on the net assets per share.

The directors' recommendation however stated, "our board (save for the interested directors) is of the opinion that the proposed disposal is fair and reasonable and in the best interests of AP Land and its non-interested shareholders."

While the offer was at an 8% premium to AP Land's closing price of 41.5 sen prior to the announcement, it is a 57% discount to the adjusted audited net assets per share of RM1.04 as of Dec 31, 2010.

The Minority Shareholder Watchdog Group's (MSWG), which was present at the meeting, pointed out the contradiction.

MSWG general manager of corporate services Lya Rahman told The Edge Financial Daily, "MSWG sought clarification from the board the reason behind the difference in opinion between the board and the audit committee with regard to the fairness of the proposed disposal, as the majority of the disinterested board comprised the members of the audit committee."

Lya said the disinterested directors informed the shareholders they had expressed their opinion that the proposed disposal was not fair and acknowledged the so-called discrepancy could be due to an error in the circular to shareholders under the directors' recommendation.

"As the discrepancy was material which could influence the voting for the proposed disposal, MSWG proposed and insisted that the EGM be adjourned to be fair to the shareholders in particular those who have filed their proxies and made decisions based on the recommendations by the disinterested directors," Lya explained.

Lya declined to comment on the fairness of the deal to minority shareholders but said, "At the end of the day, it is up to the minority shareholders to decide what they want."

According to her, the offeror LYH needs only 50% plus one share from those who attend the EGM (apart from LYH) to push the deal through, and not 75% because the proposal was made before the change in the takeover rule.

"Attendance was low perhaps due to the EGM's venue. Furthermore, they [the minority shareholders] were very passive," she added.

Some 60 shareholders turned up for the EGM. Several shareholders said the venue Tasik Puteri Golf and Country Club was inconvenient due to its remote location.

Lya said questions during the EGM revealed that the directors of AP Land had not asked LYH to increase the offer. When contacted, AP Land declined to comment.

AP Land's stock closed at 41.5 sen, slipping 1.5 sen on Tuesday.

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