Tasek Corp shareholders advised to accept revised takeover offer of RM5.80

TheEdge Tue, Aug 06, 2019 07:20pm - 4 years View Original


KUALA LUMPUR (Aug 6): Independent advisor Mercury Securities advises loss-making Tasek Corp Bhd’s minority shareholders to accept the revised takeover offer of RM5.80 per share by Singapore-listed Hong Leong Asia Ltd.

Mercury Securities commented that the revised offer for ordinary shares is “fair and reasonable”. However, the offer of RM5.80 for preference shares is “not fair but reasonable”, according to the filing by Tasek to Bursa Malaysia this evening.

Mercury Securities is of the view that the RM5.80 offer, which has been raised from RM5.50 previously, is 47 sen to 69 sen higher than the range of estimated value of Tasek’s ordinary shares, or represents a premium of between 8.82% and 13.5%.

As for the preference shares, the revised offer of RM5.80 for preference shares is 31 sen to 53 sen lower than the range of estimated value per Tasek’s preference shares, or represents a discount between 5.05% and 8.37%, according to Mercury Securities.

“Save for the above, the comments, opinions and recommendation by Mercury Securities as contained in the Independent Advice Circular remained unchanged. 

“Accordingly, Mercury Securities recommended that the holders accept the revised offer in respect of both the offer ordinary shares and the offer preference shares,” Tasek said in the filing.

The takeover offer was made by Hong Leong Asia’s two wholly-owned subsidiaries: HL Cement (M) Sdn Bhd and Ridge Star Ltd.

In a separate filing after market close, Tasek reported wider quarterly losses. The cement maker’s net loss expanded by 54.6% to RM7.19 million for the second quarter ended June 30, 2019 (2QFY19), from RM4.65 million in the previous corresponding quarter. It attributed the bigger loss to prolonged price competition and high costs of production.

The group’s revenue dropped 4.4% to RM127.68 million for the quarter under review, from RM133.57 million in 2QFY18.

For the six-month period ended Jun 30, 2019 (1HFY19), Tasek’s net loss almost doubled to RM17.61 million, from RM9.08 million in previous corresponding period, while revenue fell 1.84% to RM264.95 million, from RM269.9 million in 1HFY18.

Moving forward, Tasek expects 3QFY19 to remain challenging, due to price competition.

“Further[more], while the construction activities remain subdued, the construction sector may see some improvements in activities, if the announced revival by the government of the mega projects, proceeds as planned,” it said.

Tasek’s share price closed unchanged at RM5.79 today, giving it a market capitalisation of RM701.42 million.

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