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M&A News Perak Corp’s minority shareholders deem offer price as ‘too low’
by Cals Wed 15 Jan 2014, 14:30
| M&A News Perak Corp’s minority shareholders deem offer price as ‘too low’ |
| Business & Markets 2014 |
| Written by Charlotte Chong of theedgemalaysia.com |
| Wednesday, 15 January 2014 12:50 |
KUALA LUMPUR: A group of minority shareholders of Perak Corp Bhd has complained that the takeover offer price of RM3.90 per share is “too low” after taking into account the company’s estimated net tangible asset (NTA) that was above RM12.
The minority shareholders told The Edge Financial Daily in an email on Monday that RM6 was an acceptable price given that Perak Corp had RM180 million cash, or RM1.80 cash per share.
The shareholders, with a stake of about 4.4% collectively, also noted that the offer price is below its net asset per share of RM5.03 based on the 2012 annual report.
“Also much of the assets of Perak Corp have not been revalued and the revalued net asset value is closer to RM12 per share,” said the spokesperson for the ‘save Perak Corp minority shareholders’ movement.
“We are not suppressing the taking private of Perak Corp just for the sake of blocking it but minority shareholders are asking for a fair and reasonable price to be paid as underlying assets have appreciated a lot in the past few years and they have not been revalued for a long time,” he added.
On Jan 7, major shareholders of port operator and property developer Perak Corp — Cherry Blossom Sdn Bhd and Perak Equity Sdn Bhd — had proposed to undertake a selective capital reduction in Perak Corp and cash repayment to minority shareholders.
The acquirers who already owned a combined 52.9% of the company intended to cancel the stakes held by minority shareholders who will receive RM3.90 apiece.
The minority shareholders view that the offerors are making use of the company’s cash pile to take Perak Corp private. “This is another attempt of a controlling shareholder to buy out minority shareholders on the cheap by capitalising on the fragmented nature of minority shareholdings,” the email said.
“We understand that the minority shareholders including KAF Trustee Bhd and Horizon Group (Horizon Growth Fund NV) are banding together to fight for a higher offer price of RM6, which is still a 50% discount to the revalued net asset value of RM12 per share,” said the spokesperson.
Also, he has personally contacted Sime Darby Bhd, which holds a 6.13% in Perak Corp, to join them to block the unfair deal. “We hope Sime Darby Bhd will support us, as it is in the same boat with us,” he said, adding that it is good corporate governance for them to fight or stay neutral.
The spokesperson pointed out that a bonus issue followed by a share split, distribution of warrant and a cash dividend in species of RM1 per share are more appropriate rewards to shareholders.
Meanwhile, an industry observer said whether a shareholder would fight for a higher offer depends on the entry level.
He added, “One of the important factors is the company’s dividend yield. The shareholders would probably want to hold on to it if the yields have been good.”
Perak Corp shares closed unchanged at RM3.62 after rising to a high of RM3.64 on Monday with 961,00 shares changing hands. It is worth noting that the stock has rallied 34.07% to RM3.62 from RM2.70 on Dec 26 last year.
This article first appeared in The Edge Financial Daily, on January 15, 2014.
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