KUALA LUMPUR (June 2): Trading of shares in retail stockbroking firm TA Enterprise Bhd (TAE) and its property arm TA Global Bhd has been suspended from 9am today pending an announcement.
The request for trading suspension has sparked speculation about the Securities Commission Malaysia's (SC) decision on TAE's application to withdraw its voluntary takeover offer (VTO) to acquire up to 39.83% stake in TA Global.
To recap, TAE on May 6 submitted an application to the SC for the regulator's approval to abort the privatisation exercise, in which Datuk Tony Tiah would pump in fresh money to TAE to finance the deal.
Tiah is the co-founder and controlling shareholders of the two listed companies. Tiah and the parties acting in concerts collectively hold a 42.37% stake in TAE and 15.34% in TA Global. Meanwhile, TAE controls a 60.17% stake in TA Global.
The decision came three months after the takeover offer was made in mid-February, TAE cited the adverse impact of Covid-19 pandemic as the main reason to abort the plan.
TAE explained that the expected impact arises from the temporary suspension of operations of several hotels under TAG Group in March and April.
Will the SC grant the approval for the withdrawal of offer?
Some quarters have commented that financing of the deal should not be an issue given that offerors are required to show proof of financing before any announcement is made.
Minority Shareholder Watch Group chief executive officer Devanesan Evanson is of the view that the withdrawal will not be fair to the minority shareholders as they had taken positions based on the announced VTO.
"To now withdraw the offer is not in the best interest of minority shareholders. There must be certainty as to corporate action announcements made, otherwise investors cannot invest with confidence," he told The Edge Malaysia weekly last month.
He said if a withdrawal is permitted, there is a risk that all announced corporate actions by other public-listed companies may also be withdrawn. This may impact the fairness and orderliness of the capital market, as well as the interests of minority shareholders.
Devanesan, however, acknowledged that the regulator will not be able to please every stakeholder, be they offerors or minority shareholders, whose interests are pulling in opposite directions.
"I suppose the ultimate and most important stakeholder is the capital market — its integrity, its fairness, its orderliness — and the decision taken should tip in favour of a fair and orderly capital market," he stressed.
To recap, the offer, announced on Feb 12, stipulated TAE's plan to acquire up to 2.12 billion shares in TA Global, representing up to 39.83% interest, for 28 sen per share or RM593.43 million.
To part-fund the deal, TAE proposed the issuance of up to 550.54 million new TAE shares at 66.5 sen apiece, to be subscribed by controlling shareholder Tiah, in order to fund the acquisition.
TAE had said it did not intend to maintain the listing status of TA Global on Bursa Malaysia's Main Market.
TAE closed at 50.5 sen, bringing it some market capitalisation of RM864.51 million yesterday, while TA Global settled at 21 sen, valuing it at RM1.12 billion.