Off-Market Trades: Unisem (M) Bhd, Magni-Tech Industries Bhd, YNH Property Bhd

This article first appeared in Capital, The Edge Malaysia Weekly, on November 26, 2018 - December 02, 2018.
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ON Nov 16, semiconductor manufacturer Unisem (M) Bhd saw a series of off-market transactions in which a total of 3.13 million shares changed hands in blocks of at least 370,000 each.

While the volume is tiny — at just 0.43% of the company’s total outstanding shares — the deals coincided with a surge in trading volume on that day involving 13.98 million shares.

Unisem is currently the subject of a pre-conditional voluntary conditional takeover offer that was announced on Sept 12. The joint offerors are led by executive chairman and managing director John Chia Sin Tet and Shenzhen-listed Tianshui Huatian Technology Co Ltd, which had a market capitalisation of 8.9 billion yuan (RM5.4 billion) as at Nov 19.

The pre-conditional offer price is RM3.30 per share, an 11.11% premium to its last closing price before the offer was announced. However, the offer will not be officially made until the offerors have satisfied certain preconditions on their end. The offerors intend to maintain Unisem’s listing status.

Chia is the single largest shareholder in Unisem with 24.3% equity interest at the time of the pre-conditional offer.

The Nov 16 trading volume is significantly higher than the counter’s 100-day moving average volume of 2.2 million shares. The last daily trading volume surge was on Sept 13, the day after the offer was announced, which saw 18.28 million shares traded.

The off-market deals on Nov 16 were transacted at RM3.19 to RM3.20 per share, a slight discount to the counter’s closing price of RM3.25 on the same day. On Nov 19, Unisem closed at RM3.21 for a market capitalisation of RM2.35 billion.

It is worth noting that on Nov 16, independent director Datuk Gregory Wong Guang Seng sold 500,000 Unisem shares on the open market. The block represented his entire shareholding, according to Unisem’s latest annual report.

Garment manufacturer and distributor Magni-Tech Industries Bhd saw a block of 500,000 shares worth RM2.23 million traded off market in a single crossed trade on Nov 15.

The transacted share price was RM4.45 apiece, a slight discount to the counter’s RM4.56 closing price that day.

The transaction injected a spark into an otherwise lacklustre trading day for the stock. On Nov 15, the counter’s full-day traded volume was 525,700 shares, compared with its 100-day moving average of 114,000 shares.

It is unclear who the transacting parties were. However, executive chairman Tan Sri Tan Kok Ping has been slowly increasing his direct shareholding over the past year.

Up to Nov 16, Tan had acquired 1.86 million shares so far this year, bumping his direct stake to 10.27 million or 6.31%. Overall, his collective interest in the company stands at 22.89%.

On Nov 19, the counter closed at RM4.64 per share, down 30.6% over the past one year. Its last peak was at RM7.60 apiece in August 2017.

A series of off-market transactions saw 2.38 million YNH Property Bhd shares traded between Nov 16 and 19 in blocks of 450,000 shares or more. The transacted prices were RM1.31 to RM1.33 per share. The volume traded came to just 0.4% of the company’s outstanding shares.

Notably, the off-market trades came on the heels of a sharp 14.81% share price drop on Nov 14, when full-day trading volume surged to 7.94 million. In comparison, YNH Property’s 100-day moving average is about 1.3 million shares.

It is also worth noting that chairman Dr Yu Kuan Chon began trading actively in late April this year. Between April 26 and Nov 19, Yu has trimmed his direct stake by a net 1.86 million shares to 137.11 million shares or 25.94% equity interest. He is deemed interested in another 6.83% stake.

 

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