by SHAHEERA AZNAM SHAH/ pic by BERNAMA
KUMPULAN Powernet Bhd’s (KPB) mandatory general takeover offer (MGO) of RM1 per share tabled by its substantial shareholder and deputy chairman Datuk Dr Mohd Abdul Karim Abdullah (picture), is fair and reasonable, according to Mercury Securities Sdn Bhd.
The independent advisor noted in a circular to the exchange yesterday that the offer price was at a premium over its fair value. The offerer and persons acting in concert (PAC) already hold 50.1% of the company.
“We view the offer as fair, as the offer price of RM1 represents a premium of 60 sen or 150% over the estimated fair value per KPB share of 40 sen,” the brokerage firm noted advising other shareholders to accept the bid.
“Generally, a takeover offer would be considered ‘reasonable’ if it is ‘fair’,” it added.
KPB’s non-interested directors have agreed with Mercury Securities advise and said the offer was fair and reasonable and advised shareholders to accept the offer as well.
The chances of other KPB shareholders accepting the offer look slim as the stock has rallied to RM1.40 a share at market close yesterday, a 40% premium to the offer price. The company is now valued at RM106 million.
Tracking KPB historical share price movement, Mercury Securities stated that the offer price is higher than the daily closing market prices of KPB shares for the past three years, up to the last trading day prior to the takeover notice.
The independent advisor said KPB’s shares have been inching closer towards the offer price following the announcement of the takeover.
“The market prices of KPB’s shares have been trading above the offer price since Oct 22, 2019, at the range between RM1.13 and RM1.16.
“This may not be an indication of the future market price performance of KPB’s shares which may be influenced by, among others, the performance and prospects of the KPB, prevailing economic conditions, stock market conditions, market sentiments and other general macroeconomic conditions,” Mercury Securities said.
Last month, KPB received the MGO from Mohd Abdul Karim after he raised his stake in the company to 36.49%, following the purchase of 12.25 million shares or 16.09% stake for RM12.25 million or RM1 per share. The stock price then was 92 sen per share.
The PAC with Mohd Abdul Karim are Grand Deal Vision Sdn Bhd which is jointly owned by KPB’s MD Mustakim Mat Nun and Sarah Azreen Abdul Samat with a 10.18% stake.
The offers intend to maintain KPB’s listing status on the Main Market of Bursa Malaysia.