KUALA LUMPUR (Aug 11): High-precision plastic components maker Ge-Shen Corp Bhd has received a mandatory takeover offer (TO) from Pelita Niagamas Sdn Bhd (PNSB) at a cash offer price of 81 sen a share, which is 12.4% lower from its mid-day closing price of 92.5 sen per share today.

The mandatory TO was triggered after PNSB swept up 29.5 million shares of 50 sen each in Ge-Shen or 38.36% of Ge-Shen’s issued and paid up capital for RM23.9 million or 81 sen per share, cash, via direct business transactions today.

This has increased PNSB’s stake to 52.67%, with 40.5 million Ge-Shen shares.

PNSB is also holding 25 million or 83.33% of Ge-Shen’s redeemable convertible preference shares (Ge-Shen RCPS) of 1 sen each, according to a notice of the TO from M&A Securities Sdn Bhd, on behalf of PNSB on Bursa Malaysia today.

Hence it also offered to acquire all remaining Ge-Shen RCPS in the market at 81 sen a share, cash.

The offer price for the Ge-Shen RCPS represents an implied premium of 21 sen or 35% to the issue price of the Ge-Shen RCPS of 60 sen apiece for the Ge-Shen RCPS that was issued on April 17 this year.

PNSB is controlled by its controlling shareholder Chan Choong Kong and his spouse Chan Boon Hwee, both directors of PNSB. The duo are the ultimate offerors and persons acting in concert (PACs) in this deal.

The offer will remain open for acceptance until 5pm, for a period of not less than 21 days from today (closing date).

The offer is also extended to all new Ge-shen shares that may be issued prior to the closing date, arising from the conversion of any offer RCPS,” the notice read.

The offer is not conditional upon any minimum level of acceptances, as the PNSB already holds in aggregate more than 50% of the voting shares in Ge-Shen.

PNSB intends to maintain the listing status of Ge-Shen.

At 2.46pm, Ge-Shen (fundamentals: 2.2; valuation 1.1)’s share price has tumbled 13.23% to 82 sen, with a trading volume of 2.54 million. The current price gives it a market capitalisation of RM71 million.

The counter has climbed about 64% since mid-March, when it was trading at around 50 sen a share.

(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.)