KUALA LUMPUR (Feb 9): The RM1.03 sen per share unconditional mandatory takeover offer (MTO) on loss-making bus operator Gets Global Bhd has been deemed to be not fair and not reasonable, with shareholders told to reject the offer.
In an independent advice circular yesterday, Public Investment Bank Bhd said the offer from ADA Capital Investments Ltd and Teong Lian Aik represented a premium of 39.19% to 178.38% over the last traded share price of Gets Global as of Sept 7, 2020 and the five-day, one-month, three-month, six-month and 12-month volume-weighted average market price (VWAMP) of Gets Global’s shares until Sept 7, 2020.
It was also noted that Gets Global shares are still relatively liquid with average monthly trading liquidity of 34.48%, which is higher than the KL Consumer Product Index of 11.62% average monthly trading liquidity of the free float of KL Consumer Product Index of 11.62%.
“The holders of Gets shares will therefore have the opportunity to realise their investment in Gets in the open market at a higher price than the revised offer price,” the circular said in a bourse filing yesterday.
Public Investment Bank also pointed out that while the group planned to venture into the glovemaking business by leveraging the experience of its offerors, "there is no assurance that the group will be able to venture into the new business successfully given that the existing management does not possess any prior experience in the [business]".
"In view that the manufacturing plant for the gloves business is still under construction and has yet to commence operations, we have not taken into consideration such business for the purpose of the valuation of Gets shares," it said.
However, it qualified that the glove business could contribute positively to the group's earnings if it is successfully commercialised in the future.
At the same time, the independent adviser noted that ADA Capital and Teong intend to maintain the listing the bus operator, allowing for shareholders to participate in trading once the offer expires.
The group’s non-interested directors concurred with Public Investment Bank’s view on the offer and have also urged shareholders to reject the offer as well.
To recap, the offer was first announced in November at 55 sen apiece, after the company placed out 158 million new shares at 55 sen per share to ADA Capital. ADA Capital is owned by Teong’s brother-in-law Low Bok Tek.
Collectively, the shareholding of Teong and ADA Capital would rise from 31.87% to 59.21% of the enlarged issued shares in Gets Global upon the completion of the private placement, the company said.
The offer was revised to RM1.03 per share on Jan 22. The first closing date for the offer is Feb 19.
As it currently stands, Teong and Low control a 59.21% stake in the company.
Shares in Gets Global were down 4.31% or nine sen lower at RM2 at 11:03am, translating into a market capitalisation of RM568 million. It saw 632,200 shares done.