Thursday 28 Mar 2024
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KUALA LUMPUR (Mar 27): ACE Market-listed REDtone International Bhd has today received a conditional takeover offer from Berjaya Corp Bhd (BCorp) to acquire all the remaining shares the latter does not own.

According to REDtone (fundamental: 2.3; valuation: 0.3)’s filing with Bursa Malaysia this evening, the offer was received from Juara Sejati Sdn Bhd (JSSB), a wholly-owned subsidiary of Berjaya Group Bhd, which is in turn a wholly-owned subsidiary of BCorp, the ultimate offeror.

The announcement confirms theedgemarkets.com’s report today, citing industry observers’ view, that there was a possibility of a takeover offer.

The offer price for a REDtone share is 80 sen per share, and 32 sen per 10-year irredeemable convertible unsecured loan stock (ICULS).

The notice of the takeover offer, sent to REDtone today by RHB Investment Bank Bhd, noted that the offer price represents a discount of 3.61% or 3 sen from REDtone’s closing price on March 26, 2015, and a discount of 5.44% or 4.6 sen to its five day volume weighted average market price (VWAMP) – up to and including March 26.

The price also represents a price-to-earnings multiple of 18.1 times, based on the audited consolidated basic earnings per REDtone share for the financial year ended May 31, 2014, of 4.42 sen, as well as a price-to-book multiple of 3.09 times based on its net asset per share as May 31, 2014, of 25.85 sen.

RHB said the mandatory takeover offer was triggered subsequent to JSSB’s recent acquisition of 10.53% stake in REDtone, which brought the latter’s holding in the company, together with persons acting in concert with it, to 35.84%. The offer will be available for acceptance for 21 days.

The offer is conditional upon the offeror having received, by the closing date, valid acceptances of more than 50% of the voting shares in REDtone.

The acceptance condition shall be fulfilled no later than 5pm on or before the close of the offer, which shall be no later than the 60th day from its offer notice today, failing which the offer shall lapse.

RHB said BCorp intends to maintain REDtone’s listing status.

REDtone had recently caught the interest of not only BCorp, but also Sultan Ibrahim of Johor, who emerged as the single largest shareholder in the group with a direct 20.13% stake on Mar 16, following the conversion of his warrants and ICULS to ordinary shares, as well as the purchase of shares from the open market.

Sultan Ibrahim had acquired 74.6 million shares in the company via a married deal. Prior to the warrants and ICULS conversion, he held a 4.8% stake in REDtone.

The 74.6 million shares had been disposed by the REDtone chairman Datuk Seri Syed Ali’s vehicle Tema Juara Sdn Bhd (TJSB). Syed Ali was then left with a 10.53% indirect interest in REDtone.

But according to a separate filing today, Syed Ali had disposed of the aforesaid 10.53% stake to JSSB. Syed Ali held the stake via TJSB’s interest in another entity called Indah Pusaka Sdn Bhd.

Trading in REDtone and BCorp shares were suspended from 2pm and 2.30pm today, respectively, prior to the announcement of the takeover offer. REDtone was last traded at 83 sen, which gives it a market capitalisation of RM552.28 million, while BCorp shares were last traded at 44 sen, with a market capitalisation to RM1.82 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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