KUALA LUMPUR (Oct 21): The independent adviser for Magna Prima Bhd (KL:MAGNA) has concluded that the conditional mandatory takeover offer launched by Hallson Holdings Sdn Bhd is “not fair but reasonable” and has recommended that shareholders accept the offer of 73 sen per share.

In its independent advice circular (IAC) released on Tuesday (Oct 21), UOB Kay Hian (M) Sdn Bhd said the offer price represents a discount of 7.59% compared to Magna Prima's latest unaudited net asset value (NAV) of 79 sen per share, which makes it unfair.

But it is reasonable as it still offers shareholders an immediate opportunity to realise their investment in cash at a premium over prevailing market prices. The 73 sen offer represents premiums of between 12.3% and 21.3% over Magna Prima’s historical volume-weighted average prices up to Sept 17 — the last trading day before the offer notice.

"Based on our evaluation, we are of the opinion that the offer is not fair but reasonable. Accordingly, we have advised the non-interested directors to recommend the holders to accept the offer; and recommend that the holders accept the offer,” the adviser said.

"Given the absence of alternative bids and the illiquid nature of Magna Prima shares, the offer constitutes the only current liquidity option available to holders wishing to realise their investment in cash," UOB Kay Hian said.

The company’s non-interested directors concurred with the recommendation, noting that the proposal provides an avenue for shareholders to exit their investment amid thin trading and limited market liquidity.

The 73 sen per share offer was triggered after Hallson — jointly owned by Datuk Seri Bryan Wong Sze Chien and Magna Prima managing director Eddy Seah Ley Hong — raised its stake to 35.73% following the acquisition of a 5.66% block from Prisma Pelangi Sdn Bhd for RM16.5 million last month.

The offer is conditional upon Hallson and the person(s) acting in concert (PAC) receiving valid acceptances that would raise their collective stake above 50% of the voting shares. It will remain open for acceptance until Oct 30, 2025.

Hallson and the joint ultimate offerors have stated their intention to maintain Magna Prima’s listing on the Main Market and to continue its existing property-development business.

Magna Prima shares closed two sen or 2.86% lower at 68 sen on Tuesday, giving the company a market value of about RM273 million.