Posted by Syndicates > 2021-10-21 19:45 | Report Abuse

extend offer without revising offer price? aiyo you cannot make it lah. stingy as fk

Posted by observatory > 2021-10-21 21:32 | Report Abuse

There are three notable items from the filings today.

First is more of a curiosity. The PAC Chua Lay Peng has accepted Scientex offer. That is not a surprise by itself.

However the filing shows Chua has surrendered only 6,600 shares. According to earlier offer document Chua actually owns 40,600 shares.

What has happened to the other 34,000 shares? Have they been sold to the open market earlier for a mere extra one sen of profit? Or is Chua still holding on for a better opportunity?

Posted by observatory > 2021-10-21 21:41 | Report Abuse

Second item is Scientex has received a large acceptance of 6,985,900 shares dated 20Oct (Wed).

The volume represents 2.13% of total shares. This is an unusually large volume - larger than the combined acceptance volume of just 2 million shares in the previous 7 trading days. This large volume is likely to come from a large fund.

The fund is unlikely to be Apollo or Samarang, which have added their holdings earlier. Besides Apollo and Samarang will have to disclose their positions if they sell.

Checking against the 2020 Annual Report, the most likely candidate is Public Mutual, which as of Oct 2020 owned at least 24 million shares (7.33%) under four separate funds. May be the different fund managers have coordinated to sell partially. It’s also possible that one of them, most likely Public Islamic Select Treasures Fund, has singlehandedly disposed most of its shares.

It’s not a surprise if certain fund manager(s) may want to dispose partial/ full holding given it’s hard to sell millions of shares during normal time. The liquidity issue highlighted by someone in this thread, though not a concern for small shareholders like me, is a real challenge for fund managers who have big position and cannot afford to hold for the long term. The message of liquidity risk posted here is real, though targeted at those fund managers (but guess they don't have time to read such forum; and they already know anyway).

Coincidentally the acceptance of Public Mutual on 20Oct comes just a day after @EVEBITDA highlighted the possibility on 19Oct (a non-trading day), though he subsequently clarified my query that it was just his assumption and not from any insider source.

Luckily even if Public Mutual surrenders their entire 24 million shares holding (7.33%), the public spread of Daibochi is still at ~25% rather than the 10% as feared. Based on Bursa Listing Requirement I shared earlier, Apollo’s and Samarang’s holdings are considered public. There will be no compulsory delisting as Scientex may hope for.

Even if it’s a mere coincidence, the lesson is I'll need to pay more attention to EVEBITDA’s future assumptions! Very good foresight and timing indeed.

Posted by observatory > 2021-10-21 22:00 | Report Abuse

The third item is Scientex has extended its offer deadline from 25Oct to 8Nov. But that is the least surprising one out of the three items I mentioned.

Why would Scientex not extend the offer period? It’s allowed to take the advantage given by the listing rules. Besides more than five weeks have passed it has not even reached 70% let alone the 90% necessary for compulsory privatization.

Expect Scientex to continue its 14 day extension multiple times until its time is up in early Dec. It will collect whatever cheap ticket it can get at RM2.70 from impatient shareholders or those who are scared by the delisting story.

By the 45th day of first offer date, which is around mid Nov, Scientex will have to decide whether to raise its offer price before current offer runs out of time. Of course it also has the option to come back with a new round with a different price at a later date.

The next question is, if there is a revised offer, is it within or after 6 months (from 4-Oct)?

Form cost saving point of view, it will partly depend on the acceptance level in current offer. If acceptance is low, a revision will not cost too much extra money to pay the difference to shareholders who have already accepted at RM2.70. If acceptance is high, it is more economical to postpone the second round to 6 months later since Scientex can escape the obligations to pay earlier shareholders who accepted at RM2.70.

More importantly, the cost saving depends on the price it’s ready to pay holdouts like Apollo and Samarang. If a high price is foreseen, Scinetex may want to postpone the negotiation to next year and focus on collecting cheap tickets for now.

But as long as Daibochi privatization is strategic to Scientex, which I guess is for the option of a separate listing of the consolidated plastic division, I believe Scientex will still come back to the negotiating table. Even though it may have to pay a dearer price to Apollo and Samarang, there will be fewer shareholders left to pay!

In short, self interest dictates that Scientex is likely to drag on for a while, especially if it cannot secure Apollo and Samarang for the time being; but will come back again later.

Minority shareholders who can’t wait may choose to move on. But for long term shareholders like me who are anyway confident of Daobochi business fundamentals, growth and values; and not counting on this privatization in the first place; time is on our side!

Posted by EVEBITDA > 2021-10-22 00:20 | Report Abuse

@ observatory. u may be right that a huge block of shares came in on 20 Oct. but i doubt its from Public mutual. coz most brokers do not submit the acceptance form immediatelly after transfering the shares

Posted by EVEBITDA > 2021-10-22 00:22 | Report Abuse

they normally wait till the cut off date and submit all the acceptance forms together a few days before the acceptance date. hence, it may be collectively retail investors from all over the country.

Posted by EVEBITDA > 2021-10-22 00:23 | Report Abuse

follow IJMP GO acceptance and you may get the trend. i think public mutual is staying on which is positive for those who wants the company to stay listed.

Posted by EVEBITDA > 2021-10-22 00:26 | Report Abuse

normally the first cut off date is the low hanging fruits. retail and ppl who want to exit. next round the offerors will call brokers to inform the clients who are not holding large blocks to inform them abt the offer and the next cut off date.

Posted by EVEBITDA > 2021-10-22 00:27 | Report Abuse

sorry ignore the "not" in comment above.

Posted by EVEBITDA > 2021-10-22 00:29 | Report Abuse

my reading.. its sad for Scientex to only secure 4 % from the offer so far. i still feel Scientex has missed something or they may have some tricks up their sleeves.

Posted by EVEBITDA > 2021-10-22 00:31 | Report Abuse

normally by the first closing date a fund would have made their decision. they will not take the risk of non extension by the offeror.

Posted by EVEBITDA > 2021-10-22 00:32 | Report Abuse

scientex will be working very hard now to secure the acceptance from public mutual.

Posted by observatory > 2021-10-22 01:32 | Report Abuse

@EVEBITDA,

Thanks for your response. You've made a good point. It makes sense that the acceptance should pick up when the original deadline of 25-Oct approaches. Just that I noticed the spike on 20-Oct was unusually sharp.

Date No. of Accepted Shares
6-Oct 1,117,800
7-Oct 0
8-Oct 6,480
11-Oct 27,496
12-Oct 44,060
13-Oct 225,140
14-Oct 1,362,560
15-Oct 234,239
18-Oct 103,787
20-Oct 6,985,900

Based on 2020 Annual Report, the largest retail shareholders held slightly below 1 million shares each. The top 9 of them held in 7m+ shares in total.

If the near 7 million shares recorded on 20-Oct are indeed from multiple retail shareholders including large block holders, they are likely to come in from multiple brokers. If brokers only started to submit en masse from 20-Oct, it’s possible that some of them may submit a day or two later. Let’s observe whether there is a spread in acceptance for the next two days, characterized by multi-million acceptance each day.

It will also be interesting to check the shareholding list in the next annual report to find out who have gone and who have added their positions. At least to fulfil my curiosity.

Posted by observatory > 2021-10-22 01:53 | Report Abuse

One question. Any idea why so far there is no reported acceptance of warrants? I suppose warrants are not exempted from disclosure?

Posted by observatory > 2021-10-22 10:29 | Report Abuse

The acceptance of Chua’s remaining 34,000 shares has come in this morning. Given there is warrant acceptance, we should see Scientex's latest position on warrants in the evening announcement, if not today may be next Mon.

Posted by observatory > 2021-10-26 00:14 | Report Abuse

Up to 22-Oct, the penultimate day of original 21 day offer period, Scientex has acquired 71.17% of total shares. This represents an increase of 9.29% from its original position of 61.88% on 13-Sep when it announced the takeover.

Among the 9.29% shares added, 4.39% (14.38 million) were through acceptance, and 4.90% (16.08 million) were from open market purchase. Of the 4.90% purchased, 2.33% was bought on Day 1 on Sep-14.

The acceptance peaked on 20-Oct. EVEBITDA is probably right that Public Mutual has not accepted.

Date Acceptance % of Total
6-Oct 1,117,800 0.34%
7-Oct 0 0.00%
8-Oct 6,480 0.00%
11-Oct 27,496 0.01%
12-Oct 44,060 0.01%
13-Oct 225,140 0.07%
14-Oct 1,362,560 0.42%
15-Oct 234,239 0.07%
18-Oct 103,787 0.03%
20-Oct 6,985,900 2.13%
21-Oct 1,684,632 0.51%
22-Oct 2,585,849 0.79%

Scientex is entitled to three rounds of 2-week extensions. Barring major changes, acceptance and purchase volume are likely trend lower in coming weeks.

The next milestone for Scientex is to cross the 75% mark. It will need another 12.53 million or 3.83% shares. Let’s see how long does it take; or whether it can achieve that within the maximum allowable offer period of 60 days.

Posted by gorengkitty > 2021-10-26 09:35 | Report Abuse

JOM BUY DAIBOCI WB AND BET MOU???

Posted by observatory > 2021-10-26 17:46 | Report Abuse

In a research report today TA Securities has a Buy call on BAT Malaysia. The valuation method is based on DCF too. TA assigns a perpetual growth rate of 3% to BAT.

Recall in the so called Independent Advice Circular for Daibochi, TA assumes Daibochi perpetual growth rate will be stuck at (nominal) rate of 2% to 2.5% from 2026 onwards.

In other words, TA has assumed that the tobacco company (aided with the prospect of vaping) will have a better long term growth prospect than the packaging company that supports MNCs in the food and beverage sector!

Posted by observatory > 2021-11-02 00:20 | Report Abuse

Seven weeks have passed since Scientex announced its plan to take Daibochi private. Below is a summary of Scientex’s shareholding over the past 7 weeks.

Week --> Percentage
Pre-announcement --> 61.88%
End of week 17-Sep --> 65.32%
End of week 24-Sep --> 66.12%
End of week 1-Oct --> 66.45%
End of week 8-Oct --> 66.86%
End of week 15-Oct --> 67.50%
End of week 22-Oct --> 71.17% (note: before the end of original offer period)
End of week 29-Oct --> 71.35%

Scientex has extended its offer period once in a press notice on 21-Oct. Barring unforeseen circumstances, Scientex is likely to announce the second extension by this Thu (4-Nov). This may be followed by the final announcement on third extension by 18-Nov.

Before Scientex can reach an agreement with the fund managers who are holding out, it is only logical for Scientex to collect as much shares as possible in the maximum allowable 60 day offer period.

Posted by observatory > 2021-11-02 00:21 | Report Abuse

Felda's failed privatization of FGV in early this year may offer us some lessons.

Originally Felda owned 21.24% of FGV. Together with its PACs they owned 36.61%. In Dec 2020 their stakes increased to 50.49% after acquiring 13.88% shares from KWAP and Urusharta Jamaah. The acquisition triggered a Mandatory Offer. Like Scientex, Felda did not intend to maintain the listing status of FGV.

Source:
https://www.theedgemarkets.com/article/felda-ups-stake-fgv-3512-proposes-take-fgv-private-rm130-share

Note that Felda’s RM1.30 offer were also deemed fair by analysts at that time.

Source:
https://www.theedgemarkets.com/article/feldas-rm130-offer-fgv-shares-deemed-fair-analysts

Felda extended its offer period up to three times, for a maximum allowable offer period of 60days.

Source:
https://www.bursamalaysia.com/market_information/announcements/company_announcement?keyword=EXTENSION+OF+CLOSING+DATE&cat=&sub_type=&company=5222&mkt=&alph=&sec=&subsec=&dt_ht=&dt_lt=

By the end of the offer period in mid Mar 2021, together with its PACs, Felda managed to up their shareholding by ~30% to 80.99%. But they failed to reach the 90% threshold.

Source:
https://www.theedgemarkets.com/article/felda-fails-garner-enough-acceptance-take-fgv-private

Interestingly towards the end of offer period in late Feb, FGV share started trading above the offer price of RM1.30. Price shot up right after the offer period ended. It went to as high as RM1.67 and only briefly traded below RM1.30 for the last 7.5 months. It closed at RM1.49 today.

The price chart is here:
https://www.bursamarketplace.com/mkt/themarket/stock/FGVH/charts

This was probably helped by high CPO price. It’s also interesting to note that initially Felda stood at the sideline. But it started buying in the open market from Jun onwards at prices much higher than the original offer of RM1.30.

The last transaction was recorded on Oct-28. As of now Felda has acquired 67.15%. Together with its PACs their holdings are at 82.52%.

Source:
https://www.bursamalaysia.com/market_information/announcements/company_announcement?keyword=FEDERAL+LAND+DEVELOPMENT+AUTHORITY&cat=SH%2CCHSH&sub_type=&company=5222&mkt=&alph=&sec=&subsec=&dt_ht=08%2F06%2F2021&dt_lt=

I’m not sure who are holding the other 17.5% of shares. If Felda were to launch another offer in the near term, it will have to at least match the highest price it paid in the open market recently.

While Scientex/ Daibochi scenario is not exactly the same as Felda/ FGV, I believe there are parallels that can help us to foresee future developments.

Posted by ITCHYLEG > 2021-11-02 22:12 | Report Abuse

Due to the Budget is unfavorable to share market. I have no choice to accept 1.5 million warrants offer yesterday. balance 500k units in hand

Posted by observatory > 2021-11-03 00:13 | Report Abuse

1.5 million warrants is a big sum for a typical retail investor (assuming you’re one). If it is a substantial part of the portfolio, I will do the same too. Or at least I will switch some warrants to mother shares.

As mentioned before I’m risk adverse. While there could be upsides between now and the warrant expiry in Jun 2022, there is always an element of gamble. Warrant holders are at the mercy of macroeconomic situation (though not necessarily the budget, where the effects will be short term as market prices in the impacts including the 2022 prosperity tax for large companies).

Unlike warrant holders, long term shareholders have time on their side if their companies are sound and growing, which I believe Daibochi is. Whether there is an improved offer from Scientex or not, and whether the offer is in 2021 or beyond, to me they are just the icing on top of the long-term growth in company value. I won’ sell unless the price is right, and in fact will top up if opportunities arise.

Posted by ITCHYLEG > 2021-11-03 09:30 | Report Abuse

The gearing for warrant is 8.4375x. due to the budget is unfavorable , so i don't take the risk

Posted by observatory > 2021-11-03 10:15 | Report Abuse

The budget may have dampened any speculative interest in WB. However I don’t see any effect on the mother share which is now held by long term investors. Business wise Daibochi pre-tax profit is sub 100m so it doesn’t attract the 33% prosperity tax. Besides the F&B market it serves is a stable growing market which is not dependent on any stimulus measure. The boring nature of the business is where the attraction lies.

Posted by observatory > 2021-11-04 17:05 | Report Abuse

@Ttw570501, I notice you've just joined i3 today. Are you a current Daibochi retail shareholder? The info is actually contained in the physical document sent to you.

The question is can Scientex get 90%?

Daibochi's second largest shareholder Apollo has topped up its shares to 9.54%. It also holds > 3 million warrants to be converted to more shares if necessary.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3193300

The other major shareholder Samarang has topped up its position to 5.26%. Their actions tell the market how do they think of the RM2.70 offer.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3197921

Posted by Ttw570501 > 2021-11-04 19:24 | Report Abuse

ok, thanks.

Posted by iknownuts > 2021-11-04 19:25 | Report Abuse

@itchyleg, can u share how this warrant gearing ratio affect your decision to sell? I fail to understand how a high gearing ratio here affects anything as the ratio/warrant price is determined by the exercise price. Do u have a specific ratio you are benchmarking against?

Posted by ITCHYLEG > Nov 3, 2021 9:30 AM | Report Abuse

The gearing for warrant is 8.4375x. due to the budget is unfavorable , so i don't take the risk

Posted by ITCHYLEG > 2021-11-05 00:58 | Report Abuse

The reason I accepted the warrant offer is not due to the gearing ratio,in fact the gearing of 8.437x is considered very high. This means that you invested the same amount of fund you can earn 8.437x than the mother share.
I accepted the offer because the new STAMP DUTY of trading w.e.f.1.1.2022 is negative to the share market

Posted by ITCHYLEG > 2021-11-05 01:00 | Report Abuse

Budget 2022: Stamp duty for share transaction rises to 0.15%, RM200 cap removed. KUALA LUMPUR (Oct 29): The government has removed the RM200 stamp duty cap on contract notes for trading of listed shares, and increased the rate to 0.15%, from 0.1%

Posted by Ttw570501 > 2021-11-05 09:37 | Report Abuse

I will wait after nov 8 to dicide

Posted by observatory > 2021-11-05 10:13 | Report Abuse

@ITCHYLEG,

My take on the stamp duty. Agree it has dented market sentiment. But short term only as the market is forward looking. In fact much of the market impact has already been priced in after Monday trading.

Just look at Bursa Malaysia, arguably one of the most affected counter. Not only that it's subject to 33% prosperity tax (its pre-tax profit in FY2020 was half a billion), but the expected trading volume deduction directly hits its revenue and hence bottomline. But take a look at its share price. It closed at 7.51 on last Fri, just before budget announcement. The last 3 days of tradings show its share price has already settled at around 7, or about 7% lower. This is the market verdict on the double whammy impact (prosperity tax + stamp duty) on one of the most affected companies.

Back to Daibochi. First the budget is quite irrelevant to its business, which is what long term investors should care about. For short term speculative interest (if still any left) Daibochi trading volume is very low to start. Don't see the effect of the RM200 cap removal. The primary concerns for warrant holders should be, before time runs out by next Jun, will Scientex revise its offer, or will Daibochi delivers good results in the next 3 quarters to boost its share price higher such that it's comfortably above RM2.8 - 2.9 range. The trading volume in warrants should be a secondary concern.

However the difference lies in you said you owned 2 million warrants. There are only about 27 million outstanding warrants. In an early announcement, Scientex declared as of 21-Oct it received 7 million confirmed acceptance plus about 4 to 5 million unconfirmed acceptance. Including earlier position at 3 million, Scientex should have about 14 to 15 million warrants as of 21-Oct. Assuming Appolo and Samarang continue to hold on to their combined holding at ~6.5 million, it means as of 21-Oct the number of warrants not controlled by these three parties are 29m - 14.5m - 6.5m = 8 million.

Given you owned 2 million of them, you effectively cornered about 25% of the remaining market!

This is indeed a risk. But the risk seems to be rather unique to you.

Posted by observatory > 2021-11-05 10:22 | Report Abuse

@Ttw570501, why after Nov 8? For all we know Scientex may have given up and not extending beyond? :)

Actually by looking at the declining trading and acceptance volume, most investors have already made up their mind. They have either sold or decided to stay. Few remain undecided at this stage.

Posted by Ttw570501 > 2021-11-05 11:13 | Report Abuse

From 1997 l have not sell one lot of daibochi shares

Posted by observatory > 2021-11-05 11:34 | Report Abuse

@Ttw570501, you truly have my respects! Few investors, even those who claim to be long term like me, could have your patience! Your holding period has not only exceeded me, but also all those funds not to mention Scientex.

Do you track the total return? I suppose it’s easily a few thousand percents.

Your holding cost is virtually nil now. Whether at current 2.7, or if it drops back to 2.4, or up to 3+ doesn’t really make much of a difference to you in percentage return.

May I know the reasons that you still consider cashing out? It’s not that Daibochi has entered a declining phase considering its 125m acquisition of MPP is paying off and another 100m investment in capacity expansion?

You didn't sell a single share during the slow period a couple of years ago. Why now?

Posted by observatory > 2021-11-05 13:37 | Report Abuse

Shareholders who consider selling or accepting offer take note . The already extended once offer is scheduled to expire by 5pm 8 Nov (next Mon).

UOB will announce further extension, if any, by “at least 2 days before the Extended Closing Date”, i.e. 2 days before 8Nov. Not sure in calendar day or trading day.

So far there is no announcement yet. Keep an eye by end of today.

Posted by rohank71 > 2021-11-05 19:41 | Report Abuse

looks like no extension or any revision in price. normally it's extended at least 2 market days before the expiry.

Posted by observatory > 2021-11-05 22:42 | Report Abuse

@rohank71, your past comments show you’ve participated in a few recent takeover stocks. You must be quite used to the procedures.

I agree it looks like the offer is not extended as there is no announcement which is required 2 days before the offer expiry. However, based on Malaysian Code on Take-Overs and Mergers 2016, a price revision is still possible, in theory at least. According to Rule 12.03, the offeror can announce a revised offer no later than 46th day from the date of offer document. After that the offer needs to be kept open for at least another 14 days.

https://www.sc.com.my/api/documentms/download.ashx?id=72152df0-c094-4ff2-8e5c-989bcd667be5

I shall assume this will not happen, and plan for the various post-offer scenarios accordingly. Will return to this point at another time.

Meanwhile I observed an interesting trade pattern before the market close today. Looking back at today transaction records, Daibochi shares were bought from sellers continuously at above RM2.70 for almost the whole day.

These were the last four transactions of the day.
16:40:19 PM 50,000 shares bought at RM2.71 to RM2.73
16:42:55 PM 3,000 shares sold to buyers at RM2.70
16:43:41 PM 2,000 shares bought at RM2.72
16:50:00 PM 3,000 shares sold to buyers at RM2.70

At 16:40:19 PM, the buyer snapped up 50k shares queued at RM2.71 and RM2.72, and reached RM2.73.

But 2 minutes before pre-closing, a seller sold just 3k shares at RM2.70. This was followed by buyer snapping up the 2k shares queued at RM2.72. But at 16:50pm closing, seller sold another 3k shares at RM2.70.

I was perplexed by the trade pattern. If I were the seller, my objective would be to maximize gain by selling at a higher price if possible. I would queue at RM2.72 or even RM2.71 given there were continuous buying interest throughout the day. Why the small quantity sales at RM2.70 which only happened just before market close? Not once, but twice! It had the effect of setting the market closing price at RM2.70 instead of RM2.72.

This might be a minor point. I'm just curious about the psychology behind.

Posted by EVEBITDA > 2021-11-06 17:52 | Report Abuse

an offer can only be revised if its kept open on the 46th day. total period for a GO is 60 days max. first window 21 days followed by 14 14 days 11 days. the last 11 days is just accademic. 45th day revision to give time for IA to produce revised opinion within 7 days.

Posted by observatory > 2021-11-06 20:10 | Report Abuse

@EVEBITDA,
Thanks for the correction. I must have missed out the clause. This is what written on Code on Take-overs and Mergers, Rule 12.03 (3), “An offeror shall not revise a take-over offer or cause a take-over offer to be revised after the 46th day”

Adding to what you’ve explained that the offer must be kept open on the 46th day before it can be revised, doesn't it mean an offer can and only can be revised on the 46th day, and not on any other days? It seems very restrictive.

BTW I have another question. Assume the current offer expires by Nov 8 as scheduled, will the Offeror be obliged to pay the difference to original offerees who have already accepted, should the Offeror later acquire from open market or through another GO at an even higher price than RM2.70? What are the conditions involved?

Posted by EVEBITDA > 2021-11-06 20:29 | Report Abuse

a revision in offer can be made anytime before the 46th day. once offer is closed the offeror cant buy above the offer price dor 6 month. and normally no offerors will make another offer within 12 months... or they may have another game plan.

Posted by observatory > 2021-11-06 20:54 | Report Abuse

“once offer is closed the offeror cant buy above the offer price dor 6 month”

But this wasn't the case in Felda's offer for FGV. In this case the offer posting date was 12-Jan 2021. The offer at RM1.30 was extended three times up to 15-Mar.

Source:
https://www.bursamalaysia.com/market_information/announcements/company_announcement?keyword=EXTENSION+OF+CLOSING+DATE&cat=&sub_type=&company=5222&mkt=&alph=&sec=&subsec=&dt_ht=&dt_lt=

FGV together with its PACs only managed to acquire about 80% shares. FGV returned to buy in the open market as early as 19-May. Share price chart shows FGV was paying at higher prices than its original offer of RM1.30. The gap between offer end date and open market purchase was only about 2 months.

Source:
https://www.bursamalaysia.com/market_information/announcements/company_announcement?keyword=FEDERAL+LAND+DEVELOPMENT+AUTHORITY&cat=SH%2CCHSH&sub_type=&company=5222&mkt=&alph=&sec=&subsec=&dt_ht=08%2F06%2F2021&dt_lt=

I haven’t read about FGV having to pay the differences to offerees who had accepted its offer at RM1.30 earlier. Perhaps there is no such restriction and obligation in the first place?

Posted by EVEBITDA > 2021-11-06 21:42 | Report Abuse

12 Jan to 15 Mac is the 60 days. yes they can buy below or at offer price.. not above. its a SC rule not to buy above the GO price. its no more abt compensation but fine and or jail term to the offeror

Posted by EVEBITDA > 2021-11-06 21:43 | Report Abuse

my explanation earlier is on the basis of buying above the offer price... at or below offer price the offeror can freely buy anytime.

Posted by EVEBITDA > 2021-11-06 21:46 | Report Abuse

am sure Scientex will have their plan on whats next and hence the decision not to extend the offer any further. there is no extra cost to extend and yet they decided not to extend.

Posted by observatory > 2021-11-06 22:29 | Report Abuse

“yes they can buy below or at offer price.. not above. its a SC rule not to buy above the GO price”

I understand your point. But as you may check the FGV price chart below, since the RM1.30 offer ended on 15-Mar, FGV share has been traded above RM1.30 for considerable time.

https://klse.i3investor.com/servlets/stk/chart/5222.jsp

Below is the first out of the many filings on Felda shareholding changes since offer closed on Mar 15.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3164903

As disclosed, on 19-May Felda acquired 4,107,200 shares in the open market. On that day FGV share was traded between RM1.36 and RM1.39, which was clearly above RM1.30 offer price (In fact should the 3 sen dividend which went ex on 17-Mar be considered, Felda should have been prohibited to buy at above RM1.30 – 3 sen = RM1.27)

Felda clearly paid above offer price in just a little over 2 months after its offer expired!

I know the rules dictate that offer price cannot be lower than past purchase price by itself or its PACs in the last 3 (or 6?) months before the offer. However is there a similar rule that prohibit purchases at higher price in the subsequent 6 months?

If so it would be quite foolish of Felda to commit such an offence. This is a large GLC with access to good advisers. Besides shareholders who had accepted its offer at RM1.30 just 2 months ago could be crossed and complain to SC!

Posted by EVEBITDA > 2021-11-06 22:54 | Report Abuse

very intersting ... now I am concerned if I missed out anything understanding SC rules. tq for highlighting the above and I am too learning.

Posted by iknownuts > 2021-11-07 09:54 | Report Abuse

Check the volume on 19 may. All i can say is, not all companies are built the same, u can have the brightest ppl to advise u, but u can still make admin mistakes/think u r the smartest/most influential/most (fill in blank yourself)….

Also, just cos u know someone robbed a bank (and its illegal) does not mean everyone else will rob the bank and flaunt with the rules

This entire acquisiton by sci is very interesting, and there are a lot more drama to unfold tmr and the coming months. Getting my popcorn bucket ready

Posted by EVEBITDA > 2021-11-07 09:58 | Report Abuse

@observatort.. Para 21.02 of the takeover code prohibits buying shares above the offer price. looks like Felda has breached the rule. an email may be sent to SC at aduan@seccom.com.my

Posted by EVEBITDA > 2021-11-07 09:59 | Report Abuse

they are quite responsive.

Posted by EVEBITDA > 2021-11-07 10:22 | Report Abuse

however note 21.02 also says can buy provided its not a pre arranged transaction. a loop hole in the spirit of the code.