KUALA LUMPUR (Sept 24): Ajinomoto (Malaysia) Bhd (KL:AJI) shareholders have approved the RM20 per share offer from its parent, Ajinomoto Co Inc, to take the company private via a selective capital reduction (SCR).
According to a filing with Bursa Malaysia, at an extraordinary general meeting on Thursday, 216 shareholders holding 7.85 million shares, or 92.8% of the voted shares, backed the deal, while 56 shareholders holding about 605,653 shares, or 7.2%, voted against it.
RHB Investment Bank, the independent adviser for the proposed SCR, had deemed the offer “not fair but reasonable” and recommended that shareholders vote in favour.
RHB said the RM20 offer was below its estimated value of RM20.23 per share based on the price-earnings method and RM22.24 based on enterprise value-to-earnings before interest, taxes, depreciation and amortisation (EV/Ebitda) but still a 31.58% to the last traded price and between 30.68% and 49.94% higher than the company’s historical volume-weighted average market price. It also represented premiums to Ajinomoto Malaysia’s net asset value per share.
RHB said the company’s shares were thinly traded and had remained below RM20 for almost all trading days over the past three years. With no alternative offer on the table and Ajinomoto Co already holding 50.38% of the company, RHB said the RM20 offer gives minority shareholders an opportunity to cash out at a premium. It therefore concluded that the offer was reasonable despite being below its valuation estimates.
The RM20 offer values Ajinomoto Malaysia at about RM1.22 billion, with an enterprise value of RM873.42 million after deducting RM347.74 million in cash and liquid investments.
Prior to this, Ajinomoto Co defended the offer, saying it reflected Ajinomoto Malaysia’s historical valuation and business performance. It said the company’s average EV/Ebitda multiple was 4.26 times before the privatisation proposal, while the RM20 offer implies 8.05 times, or about 89% higher.
The parent company also rejected an independent analyst’s RM26.20 valuation, saying the companies used as comparisons were larger and more diversified. It maintained that the RM20 offer provides minority shareholders with a meaningful premium.
Ajinomoto Malaysia shares closed 1.97% higher at an all-time high of RM19.64 a share, valuing the company at RM1.19 billion. Year to date, the stock is up 43.78%.