KUALA LUMPUR (Dec 13): Shares in Scomi Energy Services Bhd rose 4.35% at mid-morning today after its minority shareholders were advised to accept its proposed merger with 65.65% shareholder Scomi Group Bhd and associate Scomi Engineering Bhd.

At 9.59am, Scomi Energy rose 0.5 sen to 12 sen with 254,700 shares traded.

Independent adviser BDO Capital Consultants Sdn Bhd said the offer price is "fair" as the fair value and market price of Scomi shares under Scenario 1 — post consolidation with Scomi Energy and Scomi Engineering — is higher than the price of Scomi Energy shares.

The same applies if Scenario 2 occurs — Scomi Engineering opts out of the merger proposal.

BDO said the offer is also at a premium of approximately 15% to 30% over the value of Scomi Energy shares, based on its volume-weighted average market price (VWAMP) for the three-month and five-day period ended Dec 6, 2017.

BDO also viewed the proposed merger as "reasonable" as Scomi Energy shares are less liquid — at 3% trailing 12-month volume-to-free float, compared with Scomi Group's 7%.

Scomi Energy shareholders were offered three Scomi shares for five Scomi Energy shares held, together with one-for-ten free warrants, for an implied offer price of 13.4 sen, which is a discount to its fair value of between 28.4 sen and 29.7 sen.