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South Korea’s Honam Petrochemical Corp has received full acceptance to take Titan Chemicals Corp Bhd private, by acquiring the remaining 27.25 per cent shares it does not own at RM2.35 apiece.

Titan shares, for which acceptance had been received by Honam after the posting date and up to 5pm closing date on Dec 24, 2010, were listed as 27.25 per cent, representing 470.89 million shares, said Titan in a filing to Bursa Malaysia today.

On Nov 1, 2010, Titan received a notice of unconditional takeover offer from Honam to acquire all remaining shares (excluding treasury shares) following Honam’s sale and purchase agreement in July to buy a 72.32 per cent stake, or 1.25 billion shares, in Titan Chemicals for RM2.94 billion.

Titan is Malaysia’s largest integrated olefin-polyolefin producer and one of the largest polyolefin producers in the region.

It operates a total of 10 integrated process facilities in Pasir Gudang and Tanjung Langsat in Johor, and also has plants in Indonesia.

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JPMorgan Securities (Malaysia) Sdn Bhd reckons the fair value of Astro All Asia Networks plc shares is between RM3.60 and RM4.20, thereby indicating that the takeover offer by T. Ananda Krishnan at RM4.30 per share is priced fairly.

JPMorgan and Public Investment Bank had been engaged as independent advisers by Astro’s board of directors. The bank also advised investors to accept the offer.

However, JPMorgan had clarified that its valuation of Astro’s fair price did not take into account the arbitration award that Astro had won against its Indonesian partner.

JPMorgan Malaysia managing director Didi Yahya, in a letter dated May 7, said the valuation did not take into account any amounts to be received by or which were due to Astro.

To recap, arbitrators in Singapore had ordered James Riady’s Lippo Group to pay RM782mil to Astro after the company lost RM1.16bil in a failed Indonesian pay-TV venture. However, observers have raised doubts that Astro would be able to recover the entire amount.

Astro Holdings made a conditional takeover of Astro on March 17 for RM4.30 per share. Astro Holdings is a special-purpose vehicle in which Ananda has a 58% stake via Usaha Tegas Sdn Bhd, with another 30% held by Khazanah Nasional Bhd and the remainder by a number of bumiputra companies.

Meanwhile, Astro’s  board of directors said in a circular to shareholders yesterday that the offer price was above the highest traded price achieved in the two-and-a-half years preceding the notice for the takeover offer and was at a premium of 23.6% over the company’s last traded market price on March 12.

Public Investment Bank said the offer provided an avenue for shareholders to realise their investment at a reasonable premium and enable them to avoid a period of substantial capital outlay the company expected to encounter in the short to medium term due to expansion plans in the domestic and foreign businesses.

However other commentators have opined that the offer price of RM4.30 per share is too low, considering the fact that Ananda had managed to extract more value out of Maxis after the latte’s privatisation in 2007. Furthermore, Astro has a growing business in India, a country whose assets are among the most sought after.

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The major shareholders of Kurnia Setia Bhd, TAS group and Pahang Agriculture Development Board (LKPP), have made an offer to acquire the entire business, including assets and liabilities of the company, for about RM270mil cash.

In a statement yesterday, plantation company Kurnia Setia said following the proposed sale of the business, it would carry out a capital repayment to all the shareholders by way of cancellation of Kurnia Setia shares in issue.

Its shareholders will receive cash of RM2.40 per share while warrant holders will receive 90 sen per warrant.

The offer was made via Kreatif Selaras Sdn Bhd, a special purpose private limited company incorporated for the acquisition.

An official letter has been submitted to the Kurnia Setia board, setting out the details of the offer, which lapses on June 18. Trading in Kurnia Setia shares was halted on June 3 pending this announcement. Trading will resume on Monday.

Kurnia Setia, which owns 14,000ha of oil palm estates in Pahang, last traded at RM2.20 while its warrants closed at 89 sen.

The purchase price of RM270mil is based on the outstanding shares of Kurnia Setia as at yesterday – 101.5 million outstanding shares and 1.8 million outstanding options under Kurnia Setia’s employees share option scheme, translating to cash of RM248mil.

Meanwhile, there are 24.6 million outstanding warrants that would translate to cash of RM22.1mil, assuming none of the warrant holders exercise their warrants between now and the acquisition completion date.

Kurnia Setia warrants have a 10-year exercise/conversion period, maturing on April 20, 2018 and were issued free to subscribers of Kurnia Setia’s rights issue.

TAS group and LKPP hold 30.5% and 22.8% in Kurnia Setia respectively while the remaining shares are held by the public.

Upon completion of the acquisition, the shareholders of Kreatif Selaras, would be LKPP and Transaksi Madani Sdn Bhd which will indirectly hold 22.8% and 77.2% in Kurnia Setia respectively.

(TAS group will be the shareholder of Transaksi upon completion of the deal).

Kreatif Selaras chairman Tengku Tan Sri Meriam Sultan Ahmad Shah said Kurnia Setia’s listing status had not accorded a fair value to the company over the years as a result of the low daily trading volume.

“The acquisition gives minority shareholders an opportunity to exit and realise their investment at RM2.45 per share – that is the RM2.40 offer price and five sen dividend to be paid,” she said.

The company paid an interim dividend of 10 sen per share for its financial year ended Dec 31 and declared a final dividend of five sen per share, payable on Aug 3.

The cash consideration of RM2.40 per share and 90 sen per warrant for the proposed acquisition was arrived at after taking into account the performance of the average market price of Kurnia Setia shares over the past three years and earnings outlook for the company, which is mainly derived from sale of fresh fruit bunches.`

Related Posts:

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