KUALA LUMPUR (Oct 11): Leading Ventures Sdn Bhd's mandatory takeover offer for Meta Bright Group Bhd (formerly known as Eastland Equity Bhd) is not fair and unreasonable, according to independent adviser UOB Kay Hian Securities (M) Sdn Bhd, which is recommending Meta Bright's shareholders to reject the offer.
In its independent advice circular filed with Bursa Malaysia on Tuesday (Oct 11), the financial institution said the offer is not fair because the offer price of seven sen represents a discount of 28.57% to the revalued net asset value of Meta Bright shares of 9.8 sen apiece.
It also said Leading Ventures' offer price of half a sen per Meta Bright warrant is a discount of 92.1% to the theoretical value of Meta Bright's warrants of 6.33 sen each.
UOB Kay Hian is of the view that the offer is not reasonable due to Leading Ventures' intention to maintain Meta Bright's listing status on the Main Market of the local exchange.
"Notwithstanding that the historical trading volumes of Meta Bright's shares and warrants are relatively illiquid in the past 12 months up to the last trading day, the holders will still be able to participate in the trading of the Meta Bright shares and/or warrants even after the closing date, and in turn having the opportunity to realise their investment in Meta Bright's shares and/or warrants in the event the market price is higher than the share offer price and/or warrant offer price," UOB Kay Hian said.
On Sept 20, Leading Ventures posted an offer document to acquire all the remaining ordinary shares and warrants in Meta Bright not already owned by the company, Meta Bright's executive director and Leading Ventures' sole director and shareholder Datuk Lee Wai Mun, and persons acting in concert with them.
It earlier served the notice to the board on Aug 30.
According to Bloomberg data, Leading Ventures is the single largest shareholder of Meta Bright with a 51.07% stake while Lee owns a 0.72% stake.
At 4.09pm, Meta Bright shares were trading half a sen or 5.26% lower at nine sen with 140,900 shares traded. Its market capitalisation is RM165.52 million.