This article first appeared in The Edge Malaysia Weekly on October 19, 2026 - October 25, 2026

Two years is a long time to miss out on a mandatory general offer (MGO). Yet that is what appears to have happened at plantation company United Malacca Bhd (KL:UMCCA), where substantial shareholders — Prosper Group’s Tee family and parties acting in concert (PAC) — crossed the 33% shareholding threshold in September 2024, yet failed to make the requisite offer to minority shareholders.

Belatedly, last Monday, apart from making an MGO at RM6.10 per share, Prosper Group founders and brothers Tee Kim Tee @ Tee Ching Tee and Tee Cheng Hua committed to compensating eligible former shareholders who disposed of their shares below the MGO price between Sept 26, 2024, and Oct 9, 2026.

Fairness of the offer price aside, the arrangement, first, raises questions about how the threshold takeover breach went unnoticed for two years.

An investment banker who spoke to The Edge on condition of anonymity believes the offerors may have overlooked the shareholdings of certain PACs when calculating their combined interest in United Malacca.

“It is rare but it happens. The offerors must have missed out on the shareholdings of certain parties acting in concert. The PAC net is cast so wide ... can’t possibly keep track sometimes,” she surmises.

Under the Capital Markets and Services Act 2007 (CMSA), PACs are individuals or companies that cooperate to acquire shares or exercise control over a company. Certain parties, including family members and related companies, are presumed to be acting together unless proven otherwise.

In United Malacca’s case, the PAC classification stems from the family and corporate links between the Tee brothers, who jointly control Prosper Trading, and their associated parties.

The Tee brothers’ remedy will mean, as an example, that an eligible shareholder who sold 100,000 shares at RM5.50 apiece within the specified window could claim RM6,000, given the 60 sen per share difference. Brokerage fees, stamp duty and other transaction costs will not be reimbursed.

When contacted by The Edge, United Malacca chairperson Datin Paduka Tan Siok Choo declined to comment and suggested The Edge refer to Prosper Group on the matter.

Incidentally, two days after the takeover notice, United Malacca in a Bursa Malaysia filing announced the demise of Prosper Group executive director Datuk Seri Tee Lip Sin, 55, on Oct 14. Lip Sin was the son of Ching Tee.

As the market waits on the opinion of the independent adviser for the exercise, several analysts have advised investors not to take up the RM6.10 offer.

The analysts suggest the offer undervalues the stock given its strong balance sheet, potential earnings contributions from maturing Indonesian estates and supportive crude palm oil (CPO) prices.

Maintaining its “outperform” recommendation and RM7 target price on United Malacca, Kenanga Research in an Oct 13 note said: “We see deep value in UMCCA as its Indonesian estates mature into a higher yielding bracket. Its balance sheet is also highly defensive with net cash and good cash flows to sustain generous dividends.”

CIMB Securities Sdn Bhd analyst Ivy Ng Lee Fang describes the offer as unattractive, noting that it represents a mere 2.2% premium to United Malacca’s closing price before the announcement.

“This values the company at just 8.8 times its historical financial year 2026 price-earnings ratio and 0.81 times its price-to-net asset value. The offer also implies an enterprise value of RM33,449 per hectare,” she says in a note last Thursday.

She says the offer price does not fully reflect the potential value of United Malacca’s estates in Melaka, Negeri Sembilan and Segamat, Johor, spanning a combined 2,834ha. The estates have a net book value of RM188.1 million, equivalent to just 62 sen psf.

“United Malacca’s net cash position of RM312.8 million, or RM1.59 per share, provides further support to its balance sheet,” says Ng, maintaining a “buy” call on the stock with an unchanged target price of RM6.93.

In fact, all four analysts on Bloomberg have “buy” calls on the stock with a consensus target price of RM6.89.

“Shareholders should await the independent adviser’s assessment before deciding whether to accept the offer. [For now], we note analysts’ preliminary view that the offer is 18% below United Malacca’s net tangible asset, so minority investors should not rush. Consider [more] views and advice first. Such offers must always be fair. As such, much would hinge on what the independent adviser says, which would determine whether this current exercise goes through,” Minority Shareholders Watch Group CEO Dr Ismet Yusoff tells The Edge.

Despite the substantial shareholding accumulated by the Tee family and their associates, the investment banker believes an eventual privatisation is far from certain.

“After the acquisition, [the Tee family and PAC] only hold 46%. Assuming no one accepts the GO (general offer), they still have a long way to go to privatise,” she says.

To this end, the offerors have stated their intention to maintain United Malacca’s listing on the Main Market of Bursa Malaysia.

Like the analysts, the banker is also sceptical that the offer will attract substantial acceptances at the current price.

United Malacca’s net asset per share stood at RM7.45 as at July 31, 2026, slightly higher than RM7.44 a year ago.

The plantation group has seen steady growth in its top and bottom lines in the last five financial years. For FY2026, the group paid a dividend of 20 sen per share, compared with between 12 sen and 18 sen per share in each of the preceding four years.

Net profit for the first quarter ended July 31, 2026 (1QFY2027), stood at RM31.8 million compared with RM37.8 million a year earlier while revenue dropped 6% to RM180.1 million from RM191.6 million, according to the group’s Bursa filing.

Although unusual, delayed compensation plans are not without precedent on Bursa.

On Sept 20, 2021, Tiong Toh Siong Enterprises Sdn Bhd (TTSE) made an unconditional mandatory takeover offer to acquire all the remaining shares in Subur Tiasa Holdings Bhd (KL:SUBUR) for a cash offer price of 65 sen per share. At the time, Subur Tiasa’s last traded price was 73.5 sen.

The MGO was triggered more than a year earlier, on Feb 20, 2020, when TTSE acquired 31.77 million ordinary shares of 16.89% of Subur Tiasa at 48 sen per share, raising the shareholdings of TTSE and the PACs in Subur Tiasa from 40.74% to 57.63%. Subsequent transactions brought the collective shareholdings to 68.76% on March 9, 2020. The requisite general offer was not made.

According to Subur Tiasa’s filing with Bursa, “the collective shareholdings of TTSE and the Enlarged PACs in STHB increased from 40.74% to 68.76% from 19 February 2020 to 9 March 2020, representing a significant increase as compared with the 2% limit within a six-month period allowed under the creeping threshold as per the Rules on Take-overs, Mergers and Compulsory Acquisitions by the Securities Commission Malaysia”.

Independent adviser DWA Advisory had recommended that shareholders reject the offer, deeming it neither fair nor reasonable as the offer price was substantially below its estimated valuation of RM4.31 to RM4.49 per share. Subur Tiasa remained listed on Bursa, with a subsequent disclosure in the 2021 annual report of related company Rimbunan Sawit Bhd (KL:RSAWIT) stating that the MGO exercise at Subur Tiasa was completed on April 13, 2022. The take-up rate for the compensation to shareholders is not known.

An earlier, more complex case involved IOI Corp Bhd’s (KL:IOICORP) major shareholders, which had crossed the 33% shareholding threshold in oleochemical player Palmco Holdings Bhd (now known as IOI Oleochemical Industries Bhd) in March 1997 but they did not make the MGO.

IOI Corp, its founder (the late) Tan Sri Lee Shin Cheng and his son, now group MD and CEO Datuk Lee Yeow Chor, had acquired 52.46 million Palmco shares, or 32.96%, at RM4.35 apiece on March 24, 1997. The following day, IOI and Shin Cheng acquired another 38,000 and 77,000 shares respectively, bringing their combined stake to 33.032%, breaching the 33% threshold.

Shin Cheng subsequently sold his 77,000 shares on April 8, 1997, while Yeow Chor, a Palmco director, acquired a further 70,000 shares in two transactions in June and August that year.

The SC ruled on Feb 5, 1999, that IOI Corp and Shin Cheng had to undertake the MGO. IOI Corp and Shin Cheng then appealed against the SC’s decision in April that year but were rejected. They were also publicly reprimanded by the SC.

It was only in July 2001, following a surprise takeover bid by Sime Darby Bhd (KL:SIME) for Palmco at RM4.35 per share, that IOI Corp launched a competing MGO and subsequently managed to accumulate more than 50% equity interest in Palmco to keep Palmco within the group.

Palmco was taken private by IOI Corp in 2005. Minority shareholders were given the choice of cash option of RM11.08 per share or cash plus IOI Corp share option, with the privatisation exercise reportedly costing RM872 million.

While former Palmco minority shareholders subsequently sued IOI Corp, Shin Cheng and Yeow Chor for damages over their failure to undertake the MGO when required, the High Court dismissed their claim in May 2011, ruling that the takeover legislation then in force did not give shareholders an independent right to claim damages for breach of the mandatory offer requirement. The Court of Appeal upheld the decision in November 2013.

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