Merge Energy shareholders told to reject offer

KUALA LUMPUR: Minority shareholders of Merge Energy Bhd have been advised to reject the unconditional mandatory takeover offer by several vendors.

KAF Investment Bank Bhd, in a circular on Bursa Malaysia today, said the offer was seen to be unfair and unreasonable and as such, advised the shareholders to reject it.

A consortium of Westiara Development Sdn Bhd, Cerdik Cempedak Sdn Bhd, Fine Approach Sdn Bhd, Anjuran Utama Sdn Bhd and Datuk Lee Tian Hock had offered to buy the remaining Merge Energy shares that they did not already own for 88 sen each.

Acording to KAF IB, the offer represented a discount of 21 sen to 22 sen per share from its own valuation of RM1.09 to RM1.10 per Merge Energy share.

KAF IB deemed the discount of between 19 per cent and 20 per cent as unfair and recommended shareholders not to accept it.

The bank also noted that Merge Energy’s shares were liquid as the counter’s “average monthly trading volume of the free float of the shares of 16.47 per cent is higher than the average monthly trading liquidity of the free float of FBM KLCI of 6.6 per cent and the average monthly trading liquidity of the free float of Bursa Malaysia Construction Index of 11.44 per cent”.

Going by this, KAF IB stressed that the offer, which valids until Jan 10, was unreasonable.

Source: NST