KUALA LUMPUR (Sept 30): The unconditional mandatory takeover offer of Subur Tiasa Holdings Bhd by Tiong Toh Siong Enterprises Sdn Bhd (TTSE) has been deemed “not fair and not reasonable” by the independent advisor DWA Advisory Sdn Bhd.

In a circular note on Thursday, DWA Advisory said the offer price represents a discount of RM3.66 to RM3.84 or approximately 84.92% to 85.52% to the estimated value of each Subur Tiasa share of between RM4.31 and RM4.49 based on the sum-of-parts valuation method. As such, the offer is not fair, it said.

The independent advisor also said the offer is not reasonable as Subur Tiasa shares will remain tradable in the Main Market.

“Hence, the holders will still have the opportunity to realise their investment in [Subur Tiasa] shares at the prevailing market prices in the open market after the closing date (although there is no assurance that [Subur Tiasa] shares will continue to trade at the current price levels and trading volume after the closing date).

“Premised on the above and our assessment, we are of the view that the offer is not fair and not reasonable. Accordingly, we recommend for the holders to reject the offer,” it added.

On Sept 20, TTSE has triggered an unconditional mandatory takeover offer to acquire all the remaining shares in Subur Tiasa for a cash offer price of 65 sen per share. The offer price is at a discount to Subur Tiasa’s last traded price of 73.5 sen a share.

TTSE and persons acting in concert (PACs) are deemed to be holding 129.15 million shares or 68.58% of Subur Tiasa shares (excluding treasury shares).

The offerors, led by Tan Sri Tiong Hiew King, did not extend the requisite mandatory take-over offer to acquire all the remaining Subur Tiasa shares when the offer obligation was triggered on Feb 20, 2020, where TTSE acquired 31.77 million ordinary shares of 16.89% of Subur Tiasa at 48 sen per share from Asanas Sdn Bhd, Insan Anggun Sdn Bhd, Nustinas Sdn Bhd, and Raya Abadi Sdn Bhd.

The acquisition resulted in an increase in the collective shareholdings of TTSE and the PACs in Subur Tiasa from 40.74% to 57.63%.

At market close, Subur Tiasa was up 4.5 sen or 5.77% to 82.5 sen, giving it a market capitalisation of RM171.36 million.