KUALA LUMPUR: Independent adviser MainStreet Advisers Sdn Bhd has deemed the unconditional mandatory takeover offer for Sabah-based property developer WMG Holdings Bhd by Exsim Borneo Sdn Bhd as "not fair and not reasonable", advising shareholders to reject the offer.
On Oct 12, Exsim Borneo agreed to acquire a 52.5 per cent stake in WMG Holdings Bhd from Syarikat Kretam (Far East) Holdings Sdn Bhd for RM75.12mil cash or 16.5 sen per WMG share.
Exsim Borneo is a subsidiary of Exsim Development Sdn Bhd, owned by Lim Aik Hoe and his brothers Aik Kiat and Aik Fu.
At the same time, Ben Kong Chung Vui, a person acting in concert with Exsim, proposed to buy an additional 17.5 per cent in WMG from Syarikat Kretam for RM25 million.
The two parties will jointly hold 70 per cent of WMG post completion of the deal.
According to an independent advice circular filed with Bursa Malaysia Securities on Monday, MainStreet said the offer prices for a total of 260 million remaining WMG shares at 16.5 sen and outstanding 155 million redeemable convertible preference shares (RCPS) at 33 sen are not fair.
The firm said the offer price for the remaining shares and RCPS represents a more than 70 per cent discount to the estimated revalued net asset value (RNAV) of 74.7 sen per WMG share, and estimated value per offer RCPS of RM1.494.
It added that the offer price of 16.5 sen is also lower than the daily volume-weighted average market prices (VWAPs) of WMG Shares since early March 2024 until Nov 4, 2024.
Concurrently, MainStreet view the offer as "not reasonable" as the shares will remain tradable on the Main Market of Bursa Malaysia as Exsim Borneo intends to maintain the listing status.
This provides the shareholders with the opportunity to realise their investment in the company at the prevailing market prices in the open market after the closing date, Nov 22, although there is no assurance that the shares will continue to trade at the current price levels and trading volumes.
At 12.30pm, WMG's share price was down five per cent at 38 sen, giving it a market capitalisation of RM329.5 million.