KUALA LUMPUR (March 9): An independent adviser has recommended Timberwell Bhd (KL:TIMWELL) shareholders to accept the 90 sen per share takeover offer from largest shareholder Wong Wai Foo, saying it is “reasonable” though “unfair”.
The cash offer is deemed “reasonable” premised on Timberwell shares’ relative illiquidity, but “unfair” due to it being a discount to the timber product manufacturer's revalued net assets value (RNAV) per share, NewParadigm Securities Sdn Bhd said in an independent advice circular on Monday.
The price-tag represents a 28% discount to Timberwell’s RNAV per share of RM1.25, the independent adviser noted.
Nonetheless, NewParadigm said it deemed the offer reasonable due to Timberwell shares’ relatively illiquid, given a simple average monthly traded volume over free float (excluding outliers) of 0.55%.
Anchored on this view, NewParadigm recommended that Timberwell shareholders accept the offer. It also advised non-interested directors to recommend that shareholders accept the offer.
Non-interested directors also concurred with NewParadigm’s evaluation and opinion that the offer is “not fair but reasonable”.
Against Timberwell's latest unaudited net assets (NA) per share of 66 sen, the 90 sen apiece offer is a 36.36% premium, NewParadigm also noted.
Wong’s mandatory takeover offer, via his vehicle Quattrini Holdings Sdn Bhd, was triggered in early February after the acquisition of an additional 7.9% stake raised his stake to 36.7%.
The offer formally kicked off on Feb 26. The offer turned unconditional on March 5 when their collective shareholding exceeded the 50% threshold, at 54.95%.
The offer remains open until 5pm on March 19. Wong intends to retain Timberwell’s listing status.
Tourism, Arts and Culture Minister Tiong King Sing disposed of his entire 15.958% stake on March 5 after accepting Wong’s takeover offer.
Shares in Timberwell ended half a sen or 0.56% higher at 90 sen, on par with the offer price, and valuing the company at RM79.7 million.