Kenanga IB: Reject offer for MCT
Investment bank deems Ayala Land’s proposal not fair and not reasonable
PETALING JAYA: The minority shareholders of property company MCT Bhd have been advised to reject the takeover offer by Philippines’ Ayala Land Ltd.
In an independent advice circular, Kenanga Investment Bank Bhd (Kenanga IB) described the takeover offer of 88 sen per share as “not fair and not reasonable.”
Kenanga IB said the offer price was at a discount of 50 sen, or 36.23%, over the estimated fair value per MCT share of RM1.38. It also represents a small premium of 0.22% to the five-day volume-weighted average market price (VWAMP).
“Accordingly, Kenanga IB advise and recommend that the shareholders reject the offer. Nonetheless, shareholders are advised to closely monitor the announcements made by the offeror and the market price of MCT shares prior to the closing date before making a decision.
“The non-interested directors of MCT, after careful assessment of the terms and conditions of the offerand the evaluation, have concurred with the recommendation of the independent adviser, that you reject the offer,” stated Kenanga IB.
Based on a “sum-of-parts valuation” method, Kenanga IB has derived an estimated fair value for the entire equity interest in MCT of about RM1.84bil or a fair value of RM1.38 per MCT share.
Ayala Land, which is the biggest property developer in the Philippines, triggered the mandatory general offer (MGO) for MCT last month after upping its stake in the firm from 32.95% to 50.19%.
Via its wholly-owned subsidiary Regent Wise Investment Ltd, Ayala Land acquired a 17.24% stake from MCT’s non-executive director Tan Sri Goh Ming Choon for RM202.5mil, or 88 sen per share.
Ayala Land first emerged in MCT in April 2015, soon after MCT’s listing on Bursa Malaysia. It took up 9.16% stake, which was part of a placement of shares at a price of RM1.28 a piece. Six months later it bumped up its shareholdings in MCT to 32.95%.
With a stronger equity interest in MCT, Ayala Land aims to tap the Malaysian property market and expand its footprint regionally.
Apart from its property development business, MCT is also involved in the construction and utilities sectors.
Post-MGO, Kenanga IB noted the offeror intends to maintain the listing status of MCT on the Main Market of Bursa Malaysia.
Notwithstanding that the MCT shares are illiquid, shareholders who hold small amount of equity interest in MCT may still be able to dispose their stake in the open market, subsequent to the closing date of the takeover offer.
The takeover offer by Regent Wise will remain open for acceptances until Feb 19, unless extended by the offeror. The offer is also not conditional upon any minimum level of acceptances.