CEO Morning Brief

Independent Adviser Says NationGate MD’s Ewein Takeover Offer Not Fair, Not Reasonable

Publish date: Tue, 18 Jul 2023, 08:44 AM
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TheEdge CEO Morning Brief
NationGate Holdings MD Ooi Eng Leong

KUALA LUMPUR (July 17): The unconditional mandatory takeover offer on Ewein Bhd by NationGate Holdings Bhd’s managing director and major shareholder Ooi Eng Leong is "not fair and not reasonable" and shareholders should reject the offer, says independent adviser UOB Kay Hian Securities (M) Sdn Bhd (UOBKH).

UOBKH said the offer price of 60 sen per share is not fair as it represents a discount of 44 sen or 42.31% to the estimated value of Ewein shares derived using the sum-of-parts valuation methodology of RM1.04.

It also represents a discount ranging from 8.2% to 17.73% to the last closing price, five-day, one-month, and three-month of volume weighted average market price (VWAP) up to the last full trading day on June 13, as well as a discount ranging from 48.42% to 50% to the last closing price and five-day VWAP of Ewein shares up to the latest practicable date of June 11.

Meanwhile, the offer as not reasonable as the offeror intends to maintain the listing status of Ewein on Bursa Malaysia's Main Market, said UOBKH in its independent advice circular on Monday (July 17).

“Furthermore, in the event that Ewein does not comply with the public spread requirement as a result of the offer, the offeror shall work together with Ewein to explore various options or proposals to rectify the non-compliance with the public spread requirement.

“The offeror [also] does not intend to invoke the provisions of subsection 222(1) of the Capital Markets and Services Act (CMSA) to compulsorily acquire any remaining offer shares for which valid acceptances have not been received prior to the closing date even if the conditions stipulated in subsection 222(1) of the CMSA are fulfilled,” UOBKH added.

The offer will remain open for acceptances until June 26, unless extended.

On June 14, Ooi made the move to acquire all the remaining 149.01 million shares or 49.41% stake not already owned by him and the persons acting in concert (PAC), Datuk Seri Hong Yeam Wah and Goh Kiang Teng, in Ewein for RM89.41 million.

The takeover offer came after Ooi raised his stake in Ewein from 3.84% to 43.82% after buying a 39.99% stake from Hijauwasa Sdn Bhd for RM72.36 million. Collectively, Ooi and the PACs hold a 50.59% stake in Ewein.

Ewein manufactures precision sheet metal moulds, tools, dies and fabricated parts, used in electrical and electronics equipment. The group also makes precision plastic injection molding products and product finishing.

On Monday, shares of Ewein jumped 18 sen or 14.06% to close at a record high of RM1.46, making it the sixth biggest gainer on Bursa Malaysia. At this price, the group has a market capitalisation of RM440.32 million.

Ewein’s trading volume was 7.04 million versus last Friday’s 7.58 million.

Read more:
Ewein receives unconditional takeover offer at 60 sen per share, lower than last traded share price

Source: TheEdge - 18 Jul 2023

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