KUALA LUMPUR (July 23): Minority shareholders of Rubberex Corp (M) Bhd have been advised to reject the takeover offer from chemical firm Hextar Global Bhd's executive director Datuk Ong Choo Meng and his 90%-held Hextar Rubber Sdn Bhd for the remaining Rubberex shares at RM1.80 apiece.
In a circular filed with Bursa Malaysia today, independent adviser MainStreet Advisers Sdn Bhd said the offer was “not fair and not reasonable”.
MainStreet Advisers said the offer price represents a discount ranging from 14 sen to RM1.25 to the five-day, one-month, three-month, six-month and one-year volume weighted average market prices (VWAPs) of Rubberex shares up to the last trading day (LTD).
“It also represents a discount of RM1.87 (50.95%), RM1.08 (37.50%) and RM1.77 (49.58%) to the five-day VWAP of the Rubberex shares up to the LPD (latest practicable date), the last transacted market price on the LTD and the last transacted market price of Rubberex shares on the LPD respectively,” it said.
It said Rubberex shares are relatively liquid as the average monthly trading liquidity of Rubberex shares of 14.32% is higher.
“Since Rubberex shares will remain traded on Bursa Securities, holders of Rubberex shares will therefore have the opportunity to dispose of their offer shares in the open market during the offer period and subsequent to the closing date at a price higher than the offer price, net of transaction cost.
"Based on the above and our evaluation as a whole, we are of the view that the offer is not fair and not reasonable. Accordingly, we recommend that the holders reject the offer," said Mainstreet Advisers.
To recap, Ong and Hextar had acquired an additional 20.63% stake in Rubberex, raising their collective interest to 50.18% — above the 33% threshold that triggers the mandatory general offer for the remaining shares they do not own in the company.
The stake, comprising 57.25 million shares, was bought at RM1.80 cash per share, or RM103.05 million in total, from Seng Sheng Enterprise Sdn Bhd, Datuk Seri Chiau Beng Teik and Peh Lian Hwa, via direct business transactions in June.
Post-acquisition, Ong and Hextar Rubber control 139.22 million shares in Rubberex, up from 81.97 million shares or 29.55% previously.