KUALA LUMPUR (Nov 11): A takeover offer on the table for Sabah-based property developer WMG Holdings Bhd (KL:WMG) is “not fair and not reasonable”, and shareholders should reject the deal, according to an independent adviser.
WMG’s non-interested directors — Shakinur Ain Karama, Teo Gim Suan, and Wong Lee Hung — shared the same stance on the offer of 16.5 sen per share by Exsim Group after considering Mainstreet Advisers Sdn Bhd’s views, the company said in an exchange filing.
“The holders will still have the opportunity to realise their investment in WMG shares at the prevailing market price on the open market after the closing date,” MainStreet said in a circular to shareholders.
Exsim Borneo Sdn Bhd and a person acting in concert, Ben Kong Chung Vui, proposed to acquire a 70% stake in WMG at 16.5 sen per share, and make a general offer for the remaining shares at the same price.
Exsim Borneo is owned by Lim Aik Hoe and his brothers Aik Kiat and Aik Fu. They intend to acquire the remaining redeemable convertible preference shares in WMG not already owned by them for 33 sen per RCPS. WMG has a total of 155 million RCPS, which are held by sole holder Syarikat Kretam (Far East) Holdings Sdn Bhd.
The offer price of 16.5 sen per share represents a discount of nearly 78% to the estimated revised net asset value of WMG, MainStreet said. The price is also a discount of 25% to the unaudited consolidated net assets per share as of June 30, 2024.
The offer also represents a discount to the daily volume-weighted average price of WMG shares from early March 2024 up to Nov 4.
Apart from that, Mainstreet said the RCPS offer is not fair, as the offer price of 33 sen represents a discount of 78%, compared with the estimated value of RM1.494 per offer RCPS on a "see-through" basis.
The offer is also not reasonable, Mainstreet said, noting that WMG shares will remain tradable on the Main Market.
Shares of WMG settled two sen or 5% lower at 38 sen at the midday trading break on Monday, giving it a market capitalisation of RM330 million.