KUALA LUMPUR: Perak Corp Bhd’s board of directors has reaffirmed its position to seek approval from its shareholders to vote in favour of the sale of its 15.74% stake in Integrax Bhd to Tenaga Nasional Bhd (TNB) for RM3.25 a share at its forthcoming extraordinary general meeting (EGM) on Friday.

In a filing with Bursa Malaysia yesterday, Perak Corp (fundamental: 1.9; valuation: 1.2) said the view took into account the fact that Integrax’s co-founder Amin Halim Rasip’s offer constitutes only a 5% equity interest in Integrax compared with TNB’s offer where Perak Corp is able to dispose of its entire 15.74% equity stake in the port operator.

“This notwithstanding the offer [by Amin] of RM3.50 for each Integrax share that is higher than TNB’s (fundamental: 1.3; valuation: 1.8) offer.

“The board is of the view that the current TNB offer is superior,” it added.

Perak Corp also pointed out that TNB and Amin had been purchasing Integrax shares subsequent to the notice of takeover by TNB dated Jan 9.

“Therefore, it is reasonable to expect that the liquidity of Integrax shares and public shareholding spread could be further adversely affected moving forward. Hence, it may constrain Perak Corp’s ability to sell the remaining 10.74% block at a later date,” it said.

“Furthermore, there is no certainty that the value of Integrax shares will increase in the short to medium term as it may be affected by, among others, the financial performance of Integrax which in turn is affected by changes in the business profile, government regulations affecting the power industry and state of the global and Malaysian economies,” it added.  

Under the terms of Amin’s offer, Taipan Merit Sdn Bhd, a wholly-owned unit of Perak Corp, has to retain a 10.74% block for three years from the date of transfer.

“However, in the event that Taipan Merit seeks to sell all or part of the 10.74% block, Amin shall be given first right of refusal to purchase such Integrax shares. This arrangement is administratively cumbersome to Perak Corp and does not serve its interest,” the group said.

“Based on chapter 10 of the listing requirements and the constituent documents of Perak Corp, the board is not required to table the Amin offer (either to accept or reject the aforesaid offer) to the shareholders of Perak Corp for their approval (at the upcoming EGM),” said Perak Corp.

TNB shares closed 2.47% lower at RM14.24 yesterday, bringing a market capitalisation of RM80.37 billion, while Perak Corp’s share price settled unchanged at RM2.85, with a market capitalisation of RM285 million.

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This article first appeared in The Edge Financial Daily, on March 24, 2015.