KUALA LUMPUR: UNISEM (M) Bhd’s shareholders have been advised to reject the takeover offer from the company’s top executives and four other vendors.
Independent adviser Public Investment Bank (PublicInvest) said the offer at RM3.30 per share was not fair and unreasonable and recommend minority shareholders to reject the offer.
To recap, Unisem’s executive chairman and managing director John Chia Sin Tet and China’s Tianshui Huatian Technology Co Ltd (TSHT) had in September launched a RM1.82 billion pre-conditional takeover offer of the semiconductor company.
Chia is currently Unisem’s single largest shareholder with a 24.28 per cent stake.
The bid is made by Huatian Electronics Group (HK) Ltd (HT Hong Kong) and Huatian Technology (Malaysia) Sdn Bhd (HT Malaysia) on behalf of TSHT, as well as John Chia, his son Alexander Chia Jhet-Wern, and John Chia’s private companies namely Jayvest Holdings Sdn Bhd and SCQ Industries Sdn Bhd.
While the pre-conditional offer was made at RM3.30 per share, at a premium of 11.11 per cent to the stock’s closing price of RM2.97 on September 12, 2018, it is below the range of the ascribed equity value per Unisem share.
PublicInvest said based on the enterprise valueover earnings before interest, tax, depreciation and amortisation (EV/EBITDA) multiple valuation method, the ascribed equity value of Unisem shares ranges from RM4.31 to RM5.38 per Unisem share.
“The offer price of RM3.30 per offer share is below the range of the ascribed equity value per Unisem share which represents a discount of RM1.01 to RM2.08 or 23.43 per cent to 38.66 per cent to the ascribed equity value per Unisem share.
“Premised on the overall assessment of the offer price, we are of the opinion that the offer is not fair,” it said in a circular today.
The parties had entered into a collaboration agreement today to form a strategic partnership for the expansion and development of both TSHT and Unisem’s businesses, the group said.
The offer is conditional upon approval by TSHT’s shareholders, the issuance of an overseas investment certificate for enterprises from China’s Gansu Department of Commerce, recordation for the offer from the National Development and Reform Commission and the necessary foreign exchange registrations.
“This pre-conditional offer announcement does not amount to a firm intention to make the offer by the joint offerors,” Unisem said.
The offerors intend to maintain the group’s listing status.
The firm offer would not be made unless and until the pre-conditions had been satisfied no later than six months from the date of collaboration agreement, Unisem said.
The parties also agreed that the current management team and operations of Unisem would remain unchanged upon completion of the offer, with an increase in Unisem’s board by three directors nominated by TSHT.
Unisem said the collaboration would enable TSHT to further strengthen its global presence by leveraging on Unisem’s network of customers in Europe and North America.
As at 3.15 p.m today, Unisem’s share is two sen lower at RM3.20.