KUALA LUMPUR (March 22): The takeover offer of Pimpinan Ehsan Bhd (PEB) at a cash offer price of RM1.07 a share by Pitahaya (M) Sdn Bhd is deemed not fair and not reasonable, according to independent adviser TA Securities Holdings Bhd.

PEB’s four non-interested directors Shamsiah Hashim @ Abu Bakar, Ibrahim Topaiwah, Jumsi Batri and Mohammad Emir Taufiq Ahmad @ Ahmad Mustapha concurred with the adviser’s evaluation and recommendation to reject the takeover offer.

“The offer is ‘not fair’ in view that although the offer price is higher than the estimated value and market prices of PEB shares up to the LTD [last trading day], the offer price is lower than the market prices of PEB shares after the LTD and up to the LPD [latest practicable date],” said the independent adviser in a circular note today.

The offer price is higher than the daily volume weighted average price (VWAP) of PEB shares since the listing and up to the LPD of March 15, 2021, representing a premium of seven sen (7%) over its last traded market price on the LTD of Feb 18, 2021, and a premium of between 7.81 sen (7.87%) and 11.15 sen (11.63%) over the five-day, one-month, three-month, six-month and one-year VWAPs up to the LTD.

TA Securities said the offer is not reasonable as PEB shares will remain tradable on the Main Market of Bursa Securities and hence, the holders will still have the opportunity to realise their investment in PEB shares at the prevailing market prices in the open market after the closing date (although there is no assurance that PEB shares will continue to trade at the current price levels and trading volume after the closing date).

“The offeror and ultimate offeror intend to maintain the listing status of PEB on the Main Market of Bursa Securities.

“The offeror and ultimate offeror do not intend to invoke the provisions of Section 222(1) of the CMSA [Capital Markets and Services Act] to compulsorily acquire any remaining offer shares for which valid acceptances have not been received before the closing date even if the conditions stipulated in Section 222(1) of the CMSA are fulfilled.

“Premised on the above and the evaluation of the offer by TA Securities, TA Securities is of the view that the offer is ‘not fair’ and ‘not reasonable’. Accordingly, TA Securities recommends that you ‘reject’ the offer,” it said.

On Feb 19, PEB announced that it had received a notice of unconditional mandatory takeover offer from Pitahaya after Pitahaya together with the parties acting in concert with the company acquired a total of 45.29 million shares, representing approximately 65.5% of the equity interest in PEB.

The group noted Pitahaya is offering RM1.07 per share in PEB, to be satisfied entirely in cash, representing the highest price paid by Pitahaya for the purchase of the PEB shares.

At the time of writing today, shares of PEB had fallen four sen or 2.72% to RM1.43, valuing the group at RM98.85 million.