KUALA LUMPUR (Nov 4): Minority shareholders of Kumpulan Powernet Bhd have been advised to accept the offer by Serba Dinamik Holdings Bhd group managing director and CEO Datuk Dr Mohd Abdul Karim Abdullah to buy the company's shares that they don't already own.
In its independent advice circular to Kumpulan Powernet's shareholders on Bursa Malaysia today, Mercury Securities Sdn Bhd recommended that shareholders accept the offer as it finds the offer "fair" and "reasonable".
According to Mercury Securities, the offer of RM1 per share is fair as it is higher than the estimated value of the shares.
Based on the RNAV (revalued net asset value) methodology, Mercury Securities has derived an estimated fair value in the group of RM30.1 million, which translates to 40 sen per share, and the offer price of RM1 represents a premium of 150% over the estimated fair value per share.
Mercury Securities said the offer is also reasonable as it provides an opportunity for shareholders to realise their investment in Kumpulan Powernet in the immediate term.
Save for the period from July 3, 2017 to July 13, 2017 and from Oct 22, 2019 up to the latest practicable date (LPD), the shares have never traded above the offer price for the past three years before the commencement of the offer period and up to the LPD.
The offer price represents a premium of 8.7% over the last traded market price of Kumpulan Powernet shares on the last trading day (LTD), and premiums between 9.9% and 28.2% over the five-day, one-month, three-month, six-month and one-year volume weighted average market prices (VWAPs) of the shares up to the LTD.
The offer price, however, represents discounts of 13.8% and 9.1% over the last traded market price of Kumpulan Powernet shares on the LPD and the five-day VWAP of its shares up to the LPD respectively.
Notwithstanding that, Kumpulan Powernet shares have been trading above the offer price since Oct 22 up to the LPD. However, only 10.8 million shares were traded during that period vis-à-vis the 47.39 million offer shares as at the LPD.
"Therefore, there can be no assurance that all holders are able to dispose [of] their offer shares at a price higher than the offer price in the open market," said the independent adviser, adding that there can also be no assurance that the market price of the shares will continue to trade at the current price levels after the closing date of the offer period.
The offeror intends to maintain the listing status of the company on the Main Market of Bursa Securities.
At 3.50pm, shares of Kumpulan Powernet were 10 sen or 8.06% higher at RM1.34, valuing the company at RM100.52 million.