Bid, Willowglen shareholders advised

> Takeover offer price not fair and not reasonable, says independent adviser Mercury Securities

PETALING JAYA: Independent adviser Mercury Securities Sdn Bhd advised Willowglen MSC Bhd shareholders to reject the takeover offer from New Advent Sdn Bhd.

In an independent advice circular filed with Bursa Malaysia yesterday, Mercury Securities said that the offer is not fair and not reasonable, and recommends that shareholders reject the offer.

Recall that Willowglen group managing director Wong Ah Chiew triggered a mandatory takeover offer in September when he increased his interest in the company up to 55%.

New Advent, a company controlled by Wong, offered to acquire all the remaining shares that it does not own in Willowglen for a cash consideration of 80 sen per share.

Mercury Securities said the offer is not fair as the 80 sen offer price is lower than and represents a discount of 12 sen to 21 sen or 13.04% to 20.79% over the range of estimated fair value per Willowglen share of 92 sen to RM1.01.

The estimated fair value range was derived based on the estimated fair value for the entire equity interest in Willowglen of RM223.36 million to RM245.54 million.

Based on its analysis, the independent adviser said the offer price has also been lower than the daily volume weighted average prices (VWAPs) of the Willowglen shares since Feb 13, 2017 up to Oct 12, representing a discount of 0.50% to 53.36% to the lowest (80.4 sen) and highest (RM1.71) daily VWAPs for the past 12 months.

“If you so wish, you may consider disposing of your Willowglen shares in the open market to realise your investment in the Willowglen shares at the prevailing market prices which are higher than the offer price, after taking into consideration the associated transaction costs involved and assuming that there will not be any revision to the offer price,” it added.

The offer is also viewed as not reasonable as the offeror intends to maintain the listing status of Willowglen on the Main Market of Bursa Securities, unless sufficient valid acceptances are obtained to invoke the compulsory acquisition by the closing date.

“The Willowglen shares are liquid, with a simple average monthly trading volume-to-free float for the past 12 months up to August 2017 of 12.48%,” said Mercury Securities.

“Premised on the offeror’s intention and our assessment, we are of the opinion that the offer is not reasonable as the Willowglen shares will remain tradable on the Main Market of Bursa Securities and considering the liquidity of the Willowglen shares, the holders should be able to realise their investment in the Willowglen shares at the prevailing market prices in the open market after the closing date,” it added.

However, it also cautioned that there is no assurance that the Willowglen shares will continue to trade at the current price levels and trading volume after the closing date.

The stock closed two sen higher at RM1.12 yesterday on some 184,800 shares done.