KUALA LUMPUR (May 10): After soaring to RM3 last Friday, shares of Cycle & Carriage Bintang Bhd (CCB) pulled back by as much as 54 sen or 18% to RM2.46 today, before rebounding in late trading.
The stock closed the day down 30 sen or 10% to RM2.70, with a total of 7.8 million shares changing hands.
Notably, the current share price is still above the RM2.40 offer price in the takeover launched by the group's majority shareholder Jardine Cycle & Carriage Ltd (Jardine CCL).
As such, if the share price holds at the current level, there is little chance Jardine CCL will succeed in its effort to privatise the Mercedes-Benz dealer.
This is the second attempt by Jardine CCL after failing for the first time in February last year to take CCB private at an offer price of RM2.20.
Meanwhile, Jardine CCL announced earlier that it had extended the deadline for its privatisation offer to May 21. The original closing date was April 28 before it was extended to May 12.
As of May 7, Jardine CCL's shareholding in CCB stood at 76.07% or 76.64 million shares, below the required level to trigger a compulsory share acquisition.
Jardine CCL needs to obtain 90% of the number of shares it did not own at the time when it launched its takeover offer in order to trigger a compulsory share acquisition.
Independent adviser Affin Hwang Investment Bank Bhd has said in a circular to CCB shareholders that the offer is not fair as the offer price of RM2.40 is lower than the estimated realisable net asset value per CCB share.
However, the independent adviser said the takeover offer is deemed reasonable as CCB shares had consistently traded below the offer price for the one year prior to the last trading day.