Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on March 13, 2019

Kian Joo Can Factory Bhd (-ve)

TRADING of shares in Kian Joo Can Factory Bhd (fundamental: 0.55/3, valuation: 1.4/3) triggered our proprietary momentum algorithm yesterday for the second time in two months.

The stock gained two sen or 0.65% to RM3.09 — just one sen below its takeover offer price — valuing the company at RM1.37 billion. A total of 1.53 million shares traded yesterday, compared with its 200-day average trading volume of 124,372 shares.

On Monday, independent adviser UOB Kay Hian Securities (M) Sdn Bhd recommended that Kian Joo minority shareholders accept the takeover offer by Can-One International Sdn Bhd at RM3.10 per share.

UOB Kay Hian viewed the offer as “not fair” — as the offer price represents a 25 sen or 7.46% discount to the estimated fair value of RM3.35 per Kian Joo share — but reasonable since its shares have not traded above the offer price for the past two years.

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