MISC; Do Not Accept Offer
Offer price: RM5.50; MISC MK

Petronas announced that the takeover offer for MISC of RM5.50/share cash is final and that there will not be further revisions to the terms and conditions. The offer will close 5pm today (19 April).

Recall on 11 April, MISC announced that EPF accepted Petronas’ takeover offer of RM5.50/share (revised up from RM5.30 on 5 April). EPF is MISC’s largest minority shareholder with a 9.5% stake. EPF’s acceptance brought Petronas’ total stake in MISC to 79.77%, as at 5pm 11 April 2013, from 62.67% preoffer. The offer is conditional upon Petronas securing 90% or more of MISC shares. To trigger compulsory acquisition, Petronas needs to secure 96.3% of MISC.

In our view, the offer undervalues the Group’s assets and prospects. We recommend minority shareholders not to accept the offer. In the event scenario B (shown below) materializes, remaining dissenting minorities have the right to require Petronas to acquire their shares at terms and price similar to the offer.

Source: HwangDBS Research - 19 Apr 2013