SCIB’s shareholders told to reject takeover offer

by FARA AISYAH/ pic credit: scib.com.my (Annual Report 2018)

THE Sarawak Consolidated Industries Bhd’s (SCIB) shareholders have been told to reject substantial shareholder Datuk Mohd Abdul Karim Abdullah’s takeover offer of RM1.10 per share as the price is deemed not fair and not reasonable.

In an exchange filing yesterday, SCIB board stated it concurs with independent advisor KAF Investment Bank Bhd’s recommendation that the offer is “not fair and not reasonable”.

“Although the offer price represents premiums ranging from 2.61% to 17.69% over the last closing price as at the last full trading date (LFTD), five-day, one-month and three-month volume-weighted average price of SCIB shares up to the LFTD, the offer price is lower than the estimated fair value per SCIB share of RM1.14 to RM1.23, which represents a discount of four sen or 3.51% to 13 sen or 10.57% respectively,” KAF noted in the filing.

SCIB is of the view that the estimated fair value is closer to the high range, taking into account growth potential of SCIB in light of the prospects for the Sarawak economy; the magnitude of the existing infrastructure projects being undertaken in the state; the position of SCIB as one of the main local suppliers of precast concrete products in the state and the background, experience and business acumen of the offeror and his intention to diversify and drive the group.

“Considering the offeror’s intention to maintain the listing status of SCIB on the Main Market of Bursa Securities, holders who choose not to accept the offer may continue to hold their offer shares and enjoy any potential capital gains or yield accretion in the future, in the event of better financial performance of the group under the direction of the offeror,” the SCIB exchange filing yesterday noted.

Mohd Abdul Karim, who is also founder and group MD/CEO of Serba Dinamik Holdings Bhd, launched a mandatory general offer (MGO) to buy over minority shareholders’ stake in SCIB on Aug 15, 2019.

The MGO was triggered after he raised his stake in the property and construction company to 42.84%, after acquiring a 20.31% stake for RM1.10 per share.

The following day, he acquired another 1.43% stake at the same price.

Since Aug 15, 2019, SCIB share price has improved by 2.8%, to close at RM1.10 yesterday.

On May 27, Mohd Abdul Karim emerged as the largest shareholder in SCIB when he acquired 19.35 million shares for a 22.53% stake in the company.

Mohd Abdul Karim, 54, is currently the non-independent and non-ED of SCIB since Aug 1, 2019.

Apart from SCIB, Mohd Abdul Karim holds a 22.53% stake in Serba Dinamik and a 20.04% stake in Kumpulan Powernet Bhd, where he is the deputy chairman.

He had earlier purchased the stake in Kumpulan Powernet on June 20, 2019, making him the single-largest shareholder in the company.