KUALA LUMPUR (Oct 25): Minority shareholders of Ornapaper Bhd, one of the country’s largest manufacturers of corrugated boards and cartons, have been advised by MainStreet Advisers Sdn Bhd to reject the mandatory takeover offer launched by its substantial shareholders Sai Ah Sai, Sai Han Siong, Sai Chin Hock and persons acting in concert (PACs), who collectively hold 33.01% of Ornapaper shares, to acquire the remaining shares at RM1.06 each or RM52.69 million.
Han Siong is chief executive director of Ornapaper, while his uncle Chin Hock is executive director and Ah Sai is non-executive director and father of Han Siong.
In an independent advice circular filed with Bursa Malaysia on Tuesday (Oct 25), the independent adviser is of the view that the offer is “not fair and not reasonable” and recommended that shareholders reject the offer.
MainStreet Advisers said the offer is not fair after taking into consideration that the offer price represents a discount of RM1.52 or 58.91% to the net assets per Ornapaper share of RM2.58. The offer price is also a discount of between 2.6 sen or 2.39% and 17.7 sen or 14.31% to the six-month and one-year volume weighted average market prices of Ornapaper shares up to Sept 20.
The adviser also highlighted that it is the intention of the Sai family and PACs to maintain the listing status of Ornapaper on the Main Market of Bursa. “As such, Ornapaper shares will remain traded on Bursa and shareholders will still be able to participate in the trading of the Ornapaper shares, even after the closing date,” it added.
The offer will remain open for acceptances until Nov 2.
MainStreet Advisers also viewed the offer as not reasonable, as the Sai family and PACs do not intend to invoke the provisions of subsection 222(1) of the Capital Markets and Services Act to compulsorily acquire any remaining offer shares from the dissenting shareholders for which acceptances have not been received on or prior to the closing date.
Meanwhile, the non-interested directors, namely Siow Kee Yen, Datuk Adillah Ahmad Nordin and Tan Chin Hwee, also concurred that the offer is not fair and not reasonable. Accordingly, they have recommended that the shareholders reject the offer.
Ornapaper shares closed unchanged at RM1.03 on Tuesday, bringing the company a market capitalisation of RM77.51 million. A total of 22,500 shares were traded.