KUALA LUMPUR: Independent adviser Public Investment Bank Bhd (Public IB) has advised shareholders of Unisem (M) Bhd to reject the takeover offer from its controlling shareholder and executive chairman/managing director John Chia and China’s Tianshui Huatian Technology Co Ltd (TSHT), saying it is not fair and not reasonable.

In a filing with Bursa Malaysia yesterday, Public IB said the offer by the joint offerors was not fair, as it was below the range of ascribed equity value per Unisem share.

This is despite the offer price representing a premium ranging from 11.1% to 40.43% over the historical share price of Unisem.

“The ascribed equity value of the entire equity interest in the group ranges from RM3.14 billion to RM3.91 billion or equivalent to RM4.31 to RM5.38 per Unisem share.

“The offer price of RM3.30 is below the range of the ascribed equity value per Unisem share and represents a discount of RM1.01 to RM2.08 or equivalent to 23.43% to 38.66% to the ascribed equity value per Unisem share,” Public IB said.

It also noted that the offer is not reasonable, as the joint offerors intend to maintain the listing status of Unisem and do not intend to acquire shares that they do not own post takeover. This means shareholders may still realise their investment in the open market at a higher price than the offer price.

Unisem’s board of directors — save for those involved in the offer who abstained from deliberations — concurred with Public IB’s findings that the takeover offer is neither fair nor reasonable. As such, they advised and recommended shareholders to reject the offer.

Nevertheless, the board is of the view that the offer presents an opportunity for the holders to materialise their investment in Unisem, considering the premium it offers over the last traded price of Unisem shares, prior to the announcement of the offer.

The takeover bid’s joint offerors are Chia, Unisem executive director Alexander Chia, Jayvest Holdings Sdn Bhd, SCQ Industries Sdn Bhd, Huatian Electronics Group (HK) Ltd (HT Hong Kong), and Huatian Technology (Malaysia) Sdn Bhd (HT Malaysia). HT Hong Kong and HT Malaysia represents TSHT and its holding company, Tianshui Huatian Electronics Group Co Ltd.

Unisem shares closed unchanged at RM3.22 yesterday, after 4.18 million shares were done, with a market capitalisation of RM2.34 billion.