an Capita ta eo er o er not fair t reasona e

PETALING JAYA: The takeover offer of Hwang Capital (M) Bhd at RM2.65 a share by the group’s major shareholders has been deemed “not fair but reasonable” by independent adviser RHB Investment Bank Bhd.

The adviser said in a circular to shareholders yesterday that the offer was not fair because the offer price was 19.5% below Hwang Capital’s net asset per share of RM3.29.

However, RHB said that the offer price was reasonable because Hwang Capital’s share price had been traded below the offer price of RM2.65 a share for the past one year and that the stock had been thinly traded.

“Hwang Capital shares have been thinly traded for the past 12 months up to April 2016, and are considered relatively illiquid,” it said.

Hwang Capital’s average monthly trading volume for the past 12 months up to April 2016 was 1.12 million shares, representing 1.07% of the free float of Hwang Capital shares, it added.

RHB said the offer price represented premiums of 21% to the five-day volume-weighted average price (VWAP) of RM2.21 and 26% to the 12-month VWAP of RM2.09. RHB has recommended Hwang Capital’s shareholder to accept the takeover offer. “In view that there is no competing or alternative takeover offer, the offer represents an opportunity for the holders to exit their investment in Hwang Capital shares at the offer price,” it said.

Recall that on May 23, Hwang Enterprises Sdn Bhd and Hwang Lip Teik, acting as joint offerors, had announced their intention to take Hwang Capital private via a conditional voluntary takeover offer of RM2.65 per share or RM469mil to be paid for in cash.

The offer price of RM2.65 represents a premium of 44 sen, or 19.91%, over its last traded price of RM2.21 on May 19 prior to its suspension. The joint offerors held 78.06 million Hwang Capital shares, or 30.59% of the issued and paid-up share capital of the group, of which 4.07% is directly under Lip Teik.