KUALA LUMPUR (June 20): ECM Libra Financial Group Bhd's shareholders have been advised to accept the unconditional takeover offer of its shares at 37 sen apiece from its managing director Lim Kian Onn by independent adviser BDO Capital Consultants Sdn Bhd.

In a letter to shareholders today, BDO Capital said it derived the estimated fair value per share of 48 sen based on the audited consolidated net asset of ECM Libra as at Jan 31, 2016. Hence it said the offer price of 37 sen a piece is at an 11 sen or 22.92% discount to the estimated fair value of 48 sen.

Having said that, the firm noted ECM Libra shares have not been traded above 37 sen for the past five years up to the date of the announcement of the takeover offer, except for the period from June 1, 2015 to Dec 7, 2015 and a short period from Dec 8 to Dec 18, 2015.

"The offer price of 37 sen is generally higher than the closing market price of ECM Libra shares for the period from Dec 8, 2015," it said, adding the offer price represents a premium of two sen or 5.71% up to the last trading day (LTD, May 19) of 35 sen.

On trading activity, BDO Capital also noted that the ECM Libra shares were relatively illiquid with an average monthly trading volume-to-free float for the past one year up to April 2016 of 3.8%.

"Additionally, it is noted that if the higher trading volume during the months of June 2015, November 2015, December 2015, February 2016 and March 2016 are excluded, the ECM Libra shares were traded at an average monthly volume of 1.44 million shares, representing 1.18% of the free float of ECM Libra for the past one year up to April 2016.

"The offer provides an opportunity for the holders to realise their investments in ECM Libra at a premium of two sen or 5.71% over the last closing price as at LTD," it added.

BDO Capital also said non-interested directors have not received any competing takeover offer nor any other offer to acquire the assets and liabilities of the ECM Libra Group.

"The non-interested directors have decided not to seek an alternative person to make a takeover offer," it said, adding the offer represents an opportunity for the holders to realise their investment in the company.

In the same document, the non-interested directors said they have carefully examined the terms and conditions of the offer and concurred with the recommendations by BDO Capital after taking into account all the above mentioned.

The financial services firm had in February this year announced that the potential mandatory general offer by Lim is priced at 37 sen per share or RM27.45 million for the 74.19 million shares or 25.89% stake.

ECM Libra said the purchase consideration is 37 sen per share for the 74.19 million shares to be purchased by Plato Capital Ltd's wholly-owned subsidiary, Truesource Sdn Bhd.

Lim's investment vehicle Truesource entered into a conditional share sale agreement yesterday, with Amcorp Group Bhd, Hikkaya Jaya Sdn Bhd, Arab-Malaysian (CSL) Sdn Bhd and Equity Vision Sdn Bhd, to purchase 74.19 million shares in ECM Libra.

Plato, a Singapore-listed entity, believed the proposed shares acquisition is "attractively priced" due to the transaction price of 37 sen per share representing a discount of 22.9% to ECM Libra's announced consolidated net asset value as at Oct 31, 2015 of RM1.48 adjusted for the completed distribution of cash and securities amounting to approximately RM1 per share to ECM Libra's shareholders as announced on Nov 4, 2015.

Lim is a director and substantial shareholder of ECM Libra and Plato. He currently holds a 24.37% stake or 69.84 million shares in ECM Libra.

Shares in ECM Libra were unchanged at 38 sen, for a market value of RM107.47 million.