KUALA LUMPUR (Dec 8): Apex Healthcare Bhd's (KL:AHEALTH) minority shareholders should accept the takeover offer by a consortium led by its major shareholder, said its independent adviser.
The proposed buyout is “fair” and “reasonable” at RM2.64 per share, according to the advice circular by Kenanga Investment Bank, appointed to advise minority shareholders of the pharmaceutical company on the offer.
The offer is fair, as the price represents a premium of between 17% and 25% over the range of estimated value per share based on sum of parts valuation of between RM2.11 and RM2.26, Kenanga noted.
The offer is also reasonable considering that its shares were illiquid, the investment bank said.
Apex Healthcare’s monthly trading volume, as a percentage of its free float, averaged just 0.73% for the past 12 months before the launch of the takeover while the FBM KLCI was seven times more active. Bursa Malaysia Healthcare Index’s trading volume was nearly 14 times higher.
Kenanga also pointed to the fact that there was no alternative offer for Apex Healthcare shares.
Dr Kee Kirk Chin, Apex Healthcare’s current chief executive officer, is partnering with Quadria Capital Investment Management Pte Ltd in a consortium to acquire the remaining shares not owned by them to take the company private.
Apex Healthcare mainly manufactures off-patent generic pharmaceuticals and medical devices. It is also a contract manufacturer for major pharmaceutical companies.
The consortium has already secured commitments from major and substantial shareholders collectively owning more than 73% of the company ahead of the deal’s announcement.
The consortium does not intend to maintain Apex Healthcare’s listing status on Bursa Malaysia, and the offer will turn compulsory once it secures 90% of the shares.
At Monday's noon market break, shares of Apex Healthcare were one sen or 0.39% higher at RM2.58, valuing the company at RM1.86 billion.