KUALA LUMPUR (July 10): China’s Hengan International Group Co Ltd’s unconditional mandatory takeover offer to acquire the remaining 50.45% stake in Wang-Zheng Bhd has been deemed “not fair and not reasonable” by independent adviser Affin Hwang Investment Bank Bhd.

“The offer price of RM1.14 per offer share is not fair, taking into account that it is lower than our estimated range of value of between RM1.16 and RM1.39 per Wang-Zheng share,” the adviser said in an independent advice circular today.

The offer price also represents a discount of 25.49% to the last traded price as at the latest practicable date (LPD),” Affin Hwang added.

The last traded price of Wang-Zheng shares as at the LPD was RM1.53, which is higher than the offer price, said Affin Hwang.

“Despite there being no other competing take-over offer for the offer shares, we are of the view that the offer is not reasonable, taking into account the following average monthly traded volume over free float of Wang-Zheng shares has generally improved since February 2017 and Wang-Zheng shares are relatively liquid,” Affin Hwang said.

Also taking into account the offeror intends to maintain the listing status of Wang-Zheng on the Main Market of Bursa Securities, Affin Hwang added.

Accordingly, as Wang-Zheng shares are relatively liquid and will remain traded on the Main Market of Bursa Securities, holders will have opportunity to realise their investments in the open market after the closing date (though there is no assurance the shares will continue to trade at current price and volume levels after the closing date), Affin Hwang IB said.

Hence, Affin Hwang IB advised and recommended holders to reject the offer.

At 9.47am, Wang-Zheng’s shares were up four sen or 2.63% to RM1.56, for a market capitalisation of RM241.04 million.