This article first appeared in The Edge Financial Daily on August 30, 2019

KUALA LUMPUR: Minority shareholders of Grand-Flo Bhd have been advised to accept the takeover offer by YBG Yap Consolidated Sdn Bhd for the rest of the shares in the information technology solutions provider for 26 sen per share.

In its independent advice circular to Grand-Flo shareholders on Bursa Malaysia yesterday, Mercury Securities Sdn Bhd recommended that shareholders accept the offer as it finds the offer “fair” and “reasonable”.

According to the independent adviser, the offer is deemed fair as the 26 sen offer price is higher than the estimated value and market price of Grand-Flo shares.

“The offer price is higher than the daily volume-weighted average price (VWAP) of Grand-Flo shares for 96.85% of the total market days for the past 12 months before the commencement of the offer period and up to Aug 23.

“The offer price also represents a premium of between 4.25% and 9.7% over the three-month, six-month and one-year VWAPs of Grand-Flo shares up to July 26,” said Mercury Securities.

It also pointed out that although the offeror intends to maintain Grand-Flo’s listing status on the Main Market of Bursa, shareholders should note that Grand-Flo shares are illiquid.

The average monthly trading volume-to-free float of Grand-Flo shares for the past 12 months up to July 2019 was 1.27%, with an average monthly trading volume of 3.47 million shares.