Friday 29 Mar 2024
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KUALA LUMPUR (Dec 14): The takeover offer for StemLife Bhd by its largest shareholder, Singapore's Cordlife Group Ltd, at 45 sen cash per share has been deemed “fair and reasonable" by its independent adviser.

In a filing with Bursa Malaysia today, StemLife said Mercury Securities Sdn Bhd has given a fair and reasonable opinion on the offer by Cordlife, as the offer price represents a premium of 4.65% to 7.14% over the fair value range of the shares.

Mercury Securities had adopted the sum-of-parts valuation (SOPV) to derive the fair value of StemLife shares. Based on the SOPV methodology, the firm had come up with a fair value ranging from RM105.1 million to RM107.3 million, or 42 sen to 43 sen per share.

The independent adviser added that the offer price is equal or higher than the closing market price of StemLife shares for 85% of the total market days over the past five years, and the price represents a premium of between 10% and 21.79% over the five-day, one-month, three-month, six-month and one-year volume weighted average market price of StemLife shares up to Nov 12, being the last full trading day prior to the take over offer.

Mercury Securities deemed the offer reasonable, considering StemLife's shares are illiquid, with a simple average monthly trading volume-to-free float for the past one year up to October 2015 of 2.88%, compared with the Kuala Lumpur Services Index of 12.92% in the same period.

“The offer is also reasonable, as there is no competing take-over offer for the shares, and the non-interested directors do not intend to seek another person to make a take-over for the shares,” said Mercury Securities.

Accordingly, Mercury Securities recommends StemLife shareholders to accept Cordlife's offer, which will remain open for acceptances till Dec 28.

Cordlife currently holds 124.86 million StemLife shares or a 50.45% stake in the company. If it were to secure a 75% stake or more in StemLife by the closing date, it does not intend to maintain StemLife's listing status and does not intend to address any shortfall to meet the public spread requirement.

As at 3.02pm today, StemLife shares were unchanged at 44.5 sen, with a market capitalisation of RM110.1 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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