This article first appeared in The Edge Financial Daily on February 28, 2020

KUALA LUMPUR: The takeover offer for TA Global Bhd by its parent company TA Enterprise Bhd is confusing for some minority shareholders as it involves a cash payout or share swap option, said the Minority Shareholders Watch Group (MSWG).

MSWG chief executive officer (CEO) Devanesan Evanson said the minority shareholders should await the independent adviser’s circular on the takeover exercise.

“We think the independent adviser’s report will contain more information as [it is] prepared by licensed professionals, and is able to give more guidance to minority shareholders, Devanesan told reporters yesterday after MSWG’s investors’ forum on the proposed privatisation of TA Global.

The forum was attended by some 30 participants, including minority shareholders of TA Global and TA Enterprise and remisiers.

The proposal to privatise TA Global by TA Enterprise co-founder and chairman Datuk Tony Tiah Thee Kian was announced on Feb 12. They proposed to acquire up to 2.12 billion shares or 39.83% equity interest in the property group.

TA Enterprise, an investment holding group with subsidiaries engaged in stockbroking and property development, owns the other 60.17% stake in TA Global.

The share swap is based on a ratio of 0.4211 of new shares in TA Enterprise to be issued at a price of 66.5 sen each for one TA Global share.

“If shareholders opt for cash, they will get 28 sen. Otherwise, if they opt for the share swap, indirectly [they] get to enjoy TA Global growth through TA Enterprise as TA Enterprise will have both stockbroking and property businesses,” said Devanesan.

He said minority shareholders who attended the forum also expressed concern about the offer price of 28 sen, which was way lower than TA Global’s estimated revised net asset value (RNAV) of RM1.10. The offer price represents a 74.5% or 82 sen discount to the counter’s RNAV.