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Irrational exuberance in MESB share price surge

TheStar Tue, Oct 13, 2020 09:57am - 1 month ago


At 9.47am, MESB was up 14.5 sen to 49.5 sen with 20.34 million shares done while its warrants jumped 12 sen to 33 sen.

KUALA LUMPUR: MESB shares and it warrants surged to multi-month highs early Tuesday after the company received a mandatory takeover offer for its shares, reflecting the irrational exuberance of investors.

At 9.47am, MESB was up 14.5 sen to 49.5 sen with 20.34 million shares done while its warrants jumped 12 sen to 33 sen.

The FBM KLCI fell 3.49 points or 0.23% to 1,514.94. Turnover was nearly one billion shares valeued at RM721.41mil. There were 298 gainers, 315 losers and 371 counters unchanged.

On Monday, MESB received a takeover offer from Lotus KFM's directors Wong Sak Kuan and Yau Ming Teck, after the two acquired a total of 29.49 million shares in MESB for RM8.85mil or 30 sen per share.

Wong is the vice chairman of Lotus KFM. Yau is a director of HLT Global Bhd and UMS-Neiken Group Bhd and he is also a director and substantial shareholder of Lotus-KFM.

They had on Monday acquired 29.48 million MESB shares or 27.79% for RM8.84mil or 30 sen per share from Angsana Inai Sdn Bhd, Konwa Industrial Sewing Machines (M) Sdn Bhd and Yew Kuok Yee.

Prior to the acquisition, they held 17.34 million MESB shares or 16.35% stake. After the acquisition, Wong owns 33.37% or 35.50 million MESB shares and Yau, 10.67% or 11.32 million shares.

At 31 sen, this is 1.5% below last Friday’s closing g price of 32 sen and 4.4% below the five day weighted average market price (VWAMP) of 32.9 sen but 7.1% above the one-month VWMAP price of 29.4 sen.

The offer period is for 21 days.

The offerors intend to maintain the listing status. They also do not intend to compulsorily acquire outstanding shares.

They have also confirmed they have sufficient financial resources to pay for the offer shares.






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