DWA Advisory, an Independent Counsel, Advises Subur Tiasa Shareholders to Reject the Takeover Bid

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The unconditional mandatory takeover bid made by Tiong Toh Siong Enterprises Sdn Bhd (TTSE) to Subur Tiasa Holdings Bhd has been judged “unfair and unreasonable” by independent advisor DWA Advisory Sdn Bhd.

DWA Advisory stated in a circular note on Thursday that the offer price reflects a reduction of RM3.66 to RM3.84 or about 84.92 to 85.52 percent to the estimated value of each Subur Tiasa share of between RM4.31 and RM4.49 using the sum-of-parts valuation technique. As such, it stated, the offer is not reasonable.

Additionally, the independent advisor stated that the offer is unreasonable because Subur Tiasa shares will continue to be traded on the Main Market.

“As a result, holders will continue to have the option of realising their investment in [Subur Tiasa] shares at the then-current open market values following the closing date (although there is no assurance that [Subur Tiasa] shares will continue to trade at the current price levels and trading volume after the closing date).

“Based on the foregoing and our judgement, we believe that the offer is neither fair nor reasonable. As a result, we urge that holders decline the offer,” it added.

On September 20, TTSE commenced an unconditional obligatory takeover bid for all remaining shares of Subur Tiasa at a cash offer price of 65 sen per share. The offer price is below Subur Tiasa’s most recent trading price of 73.5 sen per share.

TTSE and individuals acting in concert (PACs) are presumed to own 129.15 million shares, or 68.58 percent of Subur Tiasa’s outstanding shares (excluding treasury shares).

The offerors, led by Tan Sri Tiong Hiew King, did not extend the mandatory take-over offer to acquire all remaining Subur Tiasa shares when the offer obligation was triggered on February 20, 2020, when TTSE acquired 31.77 million ordinary shares representing 16.89 percent of Subur Tiasa at a price of 48 sen per share from Asanas Sdn Bhd, Insan Anggun Sdn Bhd, Nustinas Sdn

The acquisition increased TTSE and the PACs’ collective stake in Subur Tiasa from 40.74 percent to 57.63 percent.

Subur Tiasa was up 4.5 sen or 5.77 percent to 82.5 sen at market close, giving the company a market value of RM171.36 million.

Published by Zack Baharum

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