This article first appeared in The Edge Malaysia Weekly on April 6, 2026 - April 12, 2026

It should hardly be surprising that the privatisation proposal of DKSH Holdings (Malaysia) Bhd (KL:DKSH) fell through at the company’s extraordinary general meeting (EGM) last week.

After all, its largest minority shareholder, Pangolin Investment Management Pte Ltd (PIM), which holds slightly more than 10% of the total shares entitled to vote in the proposed selective capital reduction (SCR) exercise, had openly made known prior to the EGM of its intention to reject the buyout offer of RM6.15 per share as it deemed the offer too low.

For the privatisation exercise to have succeeded, DKSH Malaysia — which is ultimately controlled by Switzerland-based DKSH Holdings Ltd — would have needed the approval of independent shareholders holding at least 75% in value shares, and with no more than 10% in value shares voting against the proposal.

However, the rejection by minority shareholders was overwhelming, with 100 out of the 151 shareholders rejecting the proposal. By share value, the 100 shareholders represented about 87.47% who voted against the proposal.

Only 51 shareholders, or 12.53% in value, voted in favour of it.

The offer was deemed by DKSH Malaysia’s independent adviser as “not fair” because at RM6.15 per share, the offer is lower than the estimated intrinsic value of the company.

DKSH Malaysia is a distributor of consumer goods, healthcare and materials for a number of Fortune 500 companies, and the adviser had estimated the fair value of its shares at RM7.31 each. As such, the SCR price was seen to be at a discount of RM1.16, or 15.8% based on sum-of-parts valuation analysis. The offer price was also below the company’s net asset value of RM7.06 per share.

But the independent adviser was also of the view that the offer was “reasonable” given that the RM6.15 cash offer was a premium to DKSH Malaysia’s historical trading price, ranging between 16.7% and 24% of the company’s recent closing price. And it also pointed out that the offer afforded minorities an opportunity to exit the relatively illiquid stock.

Even so, did DKSH Malaysia miscalculate minority shareholder sentiment?

Regardless of the reason, the failed privatisation underscores the power of minority shareholders when a deal is perceived as unfair.

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