KUALA LUMPUR (Jan 22): The independent adviser for Southern Score Builders Bhd’s (KL:SSB8) deal to take over LEAP Market-listed Nova Pharma Solutions Bhd (NPS) for 37 sen a share has advised NPS shareholders to accept the deal, saying the price may not be fair but it's reasonable.
Mainstreet Advisers Sdn Bhd, in the independent advice circular filed with Bursa Malaysia earlier on Thursday, said the price is at an almost 18% discount to the 45.1 sen value it has attached to NPS’ shares. However it presents an exit opportunity for NPS shareholders in light of the limited liquidity of the stock which trades on the platform strictly for sophisticated investors.
It said that although the offer price is much higher than NPS’ net asset per share (14.4 sen), last traded price (14 sen), and initial public offering price (17 sen), it is not fair, as it is 8.1 sen (17.96%) below the estimated discounted cash flow value of 45.1 sen per share.
On the stock’s illiquid state, Mainstreet said NPS’ shares have not traded since July 2021 and should Southern Score manage to mop up more shares beyond the 73.4% they have, share trading may be further limited. In the absence of an alternative offer and also Southern Score’s intention to take the company private should its bid succeed, it said the offer is reasonable. The offer closes on Feb 4, 2026.
The mandatory takeover was triggered after Southern Score acquired a 33% stake in NPS from NPS’ chief executive officer Khoo Boo Wie, valuing the company at more than RM14 million.
Khoo has provided a cumulative profit after tax guarantee of at least RM15 million covering the 18-month financial period ending June 30, 2026, as well as FY2027 and FY2028. He has also granted Southern Score a first right of refusal to buy his remaining shares in NPS if he decides to sell them in the future.
Analysts have said the acquisition could be earnings-accretive for Southern Score. TA Securities estimated that, assuming the profit guarantee is met, NPS could contribute an average core net earnings of RM1.4 million per annum over FY2026-FY2028, lifting Southern Score’s earnings by 2.8% in FY2026, 1.4% in FY2027 and 1.2% in FY2028.
Separately, Phillip Research noted that Southern Score’s outstanding order book stood at RM1.6 billion, equivalent to 7.2 times FY2025 revenue, supported by continued momentum in data centre projects.
Kenanga Investment Bank is acting on behalf of Southern Score for the takeover.