Adviser recommends Hwang Capital minorities to accept privatisation bid

This article first appeared in The Edge Financial Daily, on August 25, 2017.
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KUALA LUMPUR: AmInvestment Bank Bhd has recommended the minority shareholders of Hwang Capital (Malaysia) Bhd to accept the privatisation offer of RM2.94 per share through a selective capital repayment (SCR) exercise, although it said that the offer is deemed “not fair”.

In the independent assessment of the privatisation exercise, AmInvestment Bank said Hwang Capital’s proposal was deemed “reasonable”, albeit the offer being “not fair”.

AmInvestment Bank explained that Hwang Capital’s SCR exercise was deemed to be reasonable, as it would pave the way for its minority shareholders to exit and realise the investment at an offer price that is higher than the counter’s last trading price.

AmInvestment Bank added that shares in Hwang Capital, which have been suspended by the stock exchange regulator since Sept 2, 2016 for breaching public shareholding rule, have never risen above RM2.94 since April 21, 2014.

Although the offer was deemed reasonable, the independent adviser said the SCR exercise was not fair as the offer value of RM2.94 per share is 14% lower than the fair value that it has ascribed to Hwang Capital, which was at RM3.42 per share.