KUALA LUMPUR (Sept 25): Shareholders of Willowglen MSC Bhd’s (KL:WILLOW) have been advised to approve the planned disposal of its core businesses.
The proposed transactions are “fair and reasonable” as well as “not detrimental” to shareholders of Willowglen, independent adviser cFSolutions Sdn Bhd said in a circular to minority shareholders posted on Friday. Shareholders are set to vote on the deals at an extraordinary general meeting on Oct 19.
“Accordingly, cfSolutions recommends that the shareholders vote in favour of the resolutions pertaining to the proposed disposals to be tabled,” the adviser said.
Under the deal announced in April, Willowglen is selling its remote building automation business to Singapore’s Elixir II Pte Ltd in a cash-and-share deal. As part of the transaction, Willowglen will take a 37.8% stake in Elixir II and partly fund this stake by pledging the shares it receives to a bank.
Elixir II serves as a special purpose vehicle holding the Excel Marco Group, which provides process control and safety systems, automation and Industrial Internet of Things solutions, and operational technology cybersecurity services.
The sale is “fair” as the implied valuations of Willowglen (Malaysia) Sdn Bhd and Willowglen Services Pte Ltd are above that of comparable companies, cFSolutions said.
The price tag of RM215.2 million is also 68% higher than Willowglen’s latest market capitalisation as well as over 12 months before the deal was announced, the adviser highlighted.
Further, Willowglen will be able to unlock and monetise its investments, participate in the growth of Elixir II and raise funds to pursue new business opportunities, cFSolutions said, noting that shareholders will also enjoy dividend payout of five sen per share from the proceeds of the sale.
In absence of competing bids, “we are of the view that the proposed disposals are reasonable”, the adviser concluded.