Ge-Shen Corporation Bhd (+ve)
HIGH-precision plastic components manufacturer Ge-Shen (Fundamental: 1.8/3, Valuation: 1.7/3) rose 18.5% to 96 sen last Friday on heavy volume.
In a circular to shareholders after market close, independent advisor TA Securities Holdings urged shareholders to accept the takeover offer by Pelita Niagamas Sdn Bhd (PNSB). However, the board of Ge-Shen advised shareholders to reject the offer.
To recap, major shareholder Chan Choong Kong, via PNSB, has increased his stake in Ge-Shen from 14.3% to 52.67% on August 11, thereby triggering the 33% mandatory takeover offer (MGO) threshold.
Based on the listing requirements, Pelita Niagamas is obliged to undertake an unconditional MGO for all the remaining shares and redeemable convertible preference shares it does not already own at 81 sen each for both. The MGO is open for acceptances until 5.00 p.m. on September 22.
Notably, Chan has been accumulating shares of Ge-Shen lately, raising his stake to 53.42% as of September 7.
This article first appeared in digitaledge Daily, on September 14, 2015.