Finally he quit as CEO. Bad CEO and manager of the company as he made so much losses. New CEO should bring in new business and fresh funds. Brighter prospects going forward

Firehawk, I think its clearly not the Joint Offerors intention to privatise. Its a mandatory GO and takeover rules states that you have to make an offer at no less than the price they acquired, in this case being RM1.60 per share. So clearly no one will accept and the GO will not succeed. They must have acquired for some purpose so we may see some corporate exercise soon which will add value to the company. Worth to hold on and see whats the game plan.

Hi gnail,

There is no double counting (i think).

The Proposed Special Dividend of RM158,642,400 or RM3.93 is as follows:
1. RM95,000,000 distribution from Proposed Disposal = RM2.35
2. RM36,357,600 distribution from Proposed Capital Reduction = RM0.90
3. RM27,284,800 distribution from cash balance and reserves = RM0.68
TOTAL = RM3.93

Its not clearly stated, but working backwards you can get the RM3.93. It is stated a few times in the announcement that this is a cash payment (ie. does not include the computation of RM100,000,000 in SKP Shares).

The acquisition offer price for the 3 operating subsidiary companies is RM5.00.

The value of the distribution to all tecnic shareholders is more than RM5.00, due to:

1. the market price of SKP being currently higher than the issue price pursuant to the offer;
2. cash distribution from the offer; and
3. cash distribution from the company's cash balances.

As for whether the offer is 'fair and reasonable' i believe the independent adviser KAF IB will advise. But no, i personally dont think shareholders are being shortchanged.

The ones who read the announcement would have determined that even though the offer is RM5.00, the actual proposed distribution back to shareholders is more than that.

As to the value of tecnic shares arising from the distributions, is not clear, with all due respect to the differing views of other comments above. If at all, the adviser/company is guilty of drafting a complex and complicated announcement, not shortchanging shareholders :)

hi firehawk, agreed its a long way to go, the adviser estimates 2nd quarter of 2015.

timeframe no different from other similar exercises.

this means that technically one should present value that figure. am not a technical person so no idea how that effects the value of tecnic.

gnail, good analysis. agree with you that based on the offer, tecnic shares is currently undervalue.

However, I read the announcement and obtained a different value.

The distribution to tecnic shareholders consist of the Proposed Special Dividend and a dividend-in-specie of the skp shares.

Proposed Special Dividend = RM3.93 cash per tecnic share (section 2.2.1 of announcement)

Dividend-in-specie of 4.27 skp shares for every 1 tecnic share held (last para of section 4 of announcement).

Based on latest skp share parice of RM0.665, tecnic share price should be valued at
RM3.93 + (4.27 * RM0.665) = RM6.770

Assuming
skp = RM0.58; tecnic = RM6.407
skp = RM0.67; tecnic = RM6.791
skp = RM0.70; tecnic = RM6.919
skp = RM0.80; tecnic = RM7.346

Conclusion, tecnic shares severely UNDERVALUED.

Let me know your thoughts.
Cheers
:)

Seems like market dont know how to price tecnic vis-a-vis skp price. Might also be due to the fact spread and free float is low, hence not much volume.

If tecnic dips, buy more.

Also once skp price moves up tecnic shareholders will be sitting pretty.

Since the major shareholder on both sides is the same party, they would have structured it to be beneficial to both sides, or else why do the exercise.

Any gains for shareholders will be multiplied many folds for the major shareholder, same with any losses. I reckon both sides will be up.

Just my 2 sens worth... :)

Per the announcement, the offer price of RM5.00 per share comprises of RM2.50 in cash and approximately 4.3 SKP Shares at RM0.58.

SKP Shares last traded at RM0.69 which makes the shares portion worth approx RM2.97. If you add that back to the RM2.50 cash, that makes RM5.47.

It looks like a good deal to minorities, based on market price.

Wait for the IA report to see the valuation of the share to conclude if its a good deal or not.

Assuming SKP price remains, then Tecnic should trade close to RM5.47 when it opens, if priced correctly.