Lien Hoe shareholders told to reject takeover offer

PETALING JAYA: Lien Hoe Corp Bhd’s shareholders has been advised to reject the takeover offer from Christine Holding Sdn Bhd for 25.5 sen per share.

This is as the offer was deemed as “not fair” and “not reasonable” by independent advisor Mercury Securities.

According to the group’s independent advice circular filed with Bursa Malaysia, based on the sum-of-parts (SOP) valuation model, the adviser estimated the value for the entire equity interest in Lien Hoe stood at RM499.58 million or RM1.50 per share.

“The offer price of 25.5 sen is lower than and represents a discount of RM1.245 (83%) over the estimated value per Lien Hoe share derived using the SOP valuation method of RM1.50.”

In addition,

the

circular highlighted that the offer price represents a discount of between 3.08% and 10.56% over its five-day, one-month, three-month, six-month and one-year volume weighted average price as at Aug 20, 2019.

Furthermore, as the offeror intends to maintain the listing status of Lien Hoe, Mercury Securities views the offer as not reasonable as the shares will remain tradeable on Bursa’s Main Market and the holders will still have the opportunity to realise their investment in the shares at the prevailing market prices in the open market.

Worth noting is that Lien Hoe shares are also iliquid, with a simple average monthly trading volume-to-free float for the past 12 months of 0.67%, which is lower than that of Bursa Malaysia Property Index.