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Tasek Corp shareholders advised to accept revised offer

TheEdge Wed, Aug 07, 2019 10:13am - 10 months ago

KUALA LUMPUR: Independent adviser Mercury Securities has advised 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 said 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 a filing by Tasek with Bursa Malaysia yesterday.

Mercury Securities said 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, representing a premium of between 8.82% and 13.5%.

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

“Save for the above, the comments, opinions and recommendations by Mercury Securities as contained in the independent advice circular remain unchanged.

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

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

In a separate filing, Tasek reported a wider quarterly loss. Net loss expanded by 54.6% to RM7.19 million for the second financial quarter ended June 30, 2019  from RM4.65 million a year earlier. It attributed the bigger loss to prolonged price competition and high cost of production.

Revenue dropped 4.4% to RM127.68 million from RM133.57 million previously.

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

Tasek expects 3QFY19 to continue to remain challenging due to price competition. “Further, while construction activities remain subdued, the construction sector may see some improvements in activities if the announced revival by the government of the megaprojects proceeds as planned,” it said.

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BURSA 8.340
TASEK 5.790


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