Takeover offer for Unisem not fair, not reasonable

PETALING JAYA: The takeover offer of RM3.30 per share for Unisem (M) Bhd by its joint offerors is not fair and not reasonable, and shareholders have been advised to reject the offer.

In its independent advice circular, independent adviser Public Investment Bank Bhd (PIVB) said that the offer price is not fair as it is below the range of the ascribed equity value of RM4.31 to RM5.38 per Unisem share.

It said that the offer price represents a discount of RM1.01 to RM2.08 or 23.43% to 38.66% to the ascribed equity value per Unisem share. This is despite the offer price representing a premium in the historical share price analysis.

Based on the historical share price analysis, the offer price represents a premium ranging from 11.11% to 40.43% over the last traded price of Unisem shares as at Sept 7 being the last full trading day prior to the date of the pre-conditional offer announcement (announcement LTD) and the five-day, one-month, three-month, six-month and 12-month volume weighted average market price of the Unisem shares up to the announcement LTD.

In its analysis of the reasonableness of the offer, PIVB noted that the offeror intends to maintain the listing status of Unisem thus the Unisem shares will remain traded on Bursa Securities.

“Holders will still be able to participate in the trading of the Unisem shares after the closing date,” it said.

It said that the holders may consider realising their investment in Unisem in the open market in the event that the market price of Unisem shares is higher than the offer price, as the joint offerors intend to maintain the listing status of Unisem.

To recap, China-based Tianshui Huatian Technology Co Ltd and Tianshui Huatian Electronics Group Co Ltd signed a collaboration agreement in September 2018 with the single largest shareholder of Unisem collectively, chairman John Chia and director Alexander Chia, as part of a plan for the Chinese parties to acquire up to 75.72% stake in Unisem for RM3.30 a share.

The deal values Unisem at almost RM2.4 billion. John, Alexander and companies affiliated to them collectively own a 24.28% stake in Unisem.

The companies are Jayvest Holdings Sdn Bhd and SCQ Industries Sdn Bhd. The RM3.30 per share offer would be satisfied in cash.

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