An independent adviser has recommended that shareholders of Concrete Engineering Products Bhd accept the RM2.60 per share takeover offer by YTL Corp Bhd’s subsidiary, YTL Cement Bhd, deeming the proposal both “fair” and “reasonable”.
In an independent advice circular issued on Monday, Mercury Securities Sdn Bhd said the offer is considered reasonable given the relatively low trading liquidity of Concrete Engineering’s shares. It is also viewed as fair as the offer price represents a meaningful premium over the company’s revalued net assets (RNAV) per share.
The RM2.60 offer price reflects a 46.9% premium to the group’s RNAV per share of RM1.77. It also represents a substantial 122.2% premium to its latest consolidated net asset value of RM1.17 per share. In addition, the offer comes at a premium ranging from 39% to 96.2% over the stock’s volume-weighted average market price (VWAP) across periods spanning five days to one year.
Mercury Securities further highlighted that Concrete Engineering’s shares have been relatively illiquid, with a simple average monthly trading volume equivalent to just 0.53% of its free float shares. This is significantly lower than the 7.1% recorded by the Bursa Malaysia Industrial Production Index, reinforcing the attractiveness of the cash offer for shareholders seeking an exit opportunity.
Based on these considerations, the adviser concluded that the offer provides a compelling opportunity for shareholders to realise their investment at a favourable price, and has therefore recommended acceptance of the takeover bid.
YTL Cement’s mandatory takeover offer was triggered in April following its acquisition of a 53.49% stake in Concrete Engineering for RM103.79 million from several vendors. These included Inch Kenneth Kajang Rubber PLC, which divested a 19.3% stake, as well as Datuk Dr Che Muhamad Fasir Samsudin and his son Muhammad Firdaus Muhamad Fasir, who sold stakes of 4.1% and 4.7% respectively.
The takeover offer officially opened on April 22 and will remain valid until May 13, unless revised or extended.
As at the midday trading break, shares in Concrete Engineering were up three sen, or 1.16%, to RM2.62, giving the company a market capitalisation of approximately RM195.5 million.
