Affin Hwang: Hengan’s offer unfair, unreasonable

PETALING JAYA: Wang-Zheng Bhd’s independent adviser Affin Hwang Capital has advised shareholders to reject the unconditional mandatory takeover offer by Hengan (Malaysia) Investments Co Ltd for RM1.44 per offer share, calling it not fair and not reasonable.

Affin Hwang viewed that the offer price of RM1.14 per share is not fair, taking into account that it is lower than its estimated range of value of between RM1.16 and RM1.39 per Wang-Zheng share; and represents a discount of 25.49% to the last traded price on July 3. The last traded price of Wang-Zheng shares as at July 3 was RM1.53, which is higher than the offer price.

“Despite there being no other competing takeover offer for the offer shares, the offer is not reasonable, taking into account the average monthly traded volume over free float of Wang-Zheng shares has generally improved since February 2017 and its shares are relatively liquid; and the offeror intends to maintain the listing status of Wang-Zheng on the Main Market of Bursa Securities,” Affin Hwang said in its independent advice circular to shareholders yesterday.

There is no assurance that Wang-Zheng shares will continue to trade at current price and volume levels after the closing date.

To recap, Hengan’s offer came after it purchased a 50.45% stake in Wang Zheng, triggering a mandatory general offer.

Hengan Malaysia, an indirect subsidiary of Hengan International, trades personal hygiene products. Hengan International group is engaged in the manufacture, distribution and sale of personal hygiene products, mainly in China.

Wang-Zheng closed 2.63% lower at RM1.48 yesterday, with 219,900 shares traded.