KUALA LUMPUR (Aug 4): The independent adviser for Kim Hin Industry Bhd (KL:KIMHIN) has advised minority shareholders against taking chairman Chua Seng Huat’s offer to take the company private for 85 sen a share, calling it not fair and not reasonable.
In an independent advice circular, New Paradigm Securities Bhd said the 85 sen per share offer by Chua is RM2.25 or 72.58% lower than Kim Hin’s estimated value of RM3.10 per share. The revalued net asset value (RNAV) was based on Kim Hin’s unaudited financials as of March 31, 2025, including updated values of its property assets. It said it is also less than half of Kim Hin’s value per share based on a net asset of RM1.88 a share.
As of March 31, 2025, the group held non-current assets valued at RM180.56 million and current assets of RM209.53 million, giving it total assets of around RM390.1 million.
The independent adviser said that its RNAV estimate assumes Kim Hin can dispose of all its assets on an open-market, willing buyer–willing seller basis within the near to medium term. However, it cautioned that there is no certainty that all assets will fetch full market value.
It said the offer is over 80% higher than recent market prices but still far below the company’s true value.
The adviser noted that Kim Hin shares have long been illiquid and warned that past trading doesn’t guarantee future liquidity, which depends on the company’s performance and market conditions. It also said the offer is not reasonable, as the company still meets public shareholding requirements and remains listed. Chua and the joint offerors collectively hold 63.78% in the company. The public still owns 29.51% interest.
Non-interested directors of the deal Datuk Sim Kheng Boon, Kho Soon Kheng and Aw Tai Hui have concurred with the independent adviser’s views and also recommend shareholders reject the offer.
On July 4, UOB Kay Hian, for Chua and his family, announced a plan to buy the remaining 37.75% of Kim Hin shares they don’t own at 85 sen each.
If they get at least 90% of the remaining shares (excluding their own), they plan to use the Capital Markets and Services Act 2007 to compulsorily buy out the rest of the shares at the same price, even if not all offer conditions are met.