KUALA LUMPUR: Minority shareholders of Mulpha Land Bhd (fundamental: 1.3; valuation: 1.3) have been told to reject the takeover offer at 49.7 sen a share by Teladan Kuasa Sdn Bhd.

Independent adviser MainStreet Advisers Sdn Bhd said the offer is “not fair and not reasonable”, because the offer price represents a discount of 29% to its realisable net asset value of 70 sen a share.

“Mulpha Land shares have generally been traded below the offer price during the past one year to last trading day (LTD). The offer price represents a range of premiums ranging between 2.16% and 8.71% to the one-month, three-month, six-month and one-year volume-weighted average price (VWAP) up to the LTD,” said MainStreet in a circular filed with Bursa Malaysia yesterday. It also noted that the offer price represents a discount of 20.25% to the VWAP for the period between the LTD and the last practicable date.

MainStreet also deemed the offer “not reasonable” after it took into consideration the offeror’s intention to maintain Mulpha Land’s listing status, and Teladan Kuasa’s intention not to compulsorily acquire all the shares it does not own if it receives acceptances of not less than nine-tenth in nominal value of the offer shares and the rights of dissenting shareholders. It said the company’s non-interested directors had concurred with its views and had given the same advice to Mulpha Land shareholders.

To recap, Teladan Kuasa, a private vehicle of Datuk Fakhri Yassin Mahiaddin, made a mandatory takeover offer to acquire Mulpha Land shares last month. The offer came after Teladan Kuasa exercised a call option to acquire 75 million option shares, representing up to 32.85% equity interest in Mulpha Land.

Upon completion of the call option, the aggregate equity interest of Teladan Kuasa, Ketapang Capital Sdn Bhd and Fakhri, who are ultimate offerors and persons acting in concert with them, reached 50.38% of Mulpha Land shares. This call option exercise was completed on March 26.

This article first appeared in The Edge Financial Daily, on April 7, 2015.