Accept Kuok Brothers takeover offer, Jerneh Asia shareholders told
Written by Chua Sue-Ann of theedgemalaysia.com
Thursday, 01 December 2011 20:59
KUALA LUMPUR (Dec 1): JERNEH ASIA BHD []'s shareholders have been advised to accept the takeover offer by the group's major shareholder, Kuok Brothers Sdn Bhd, for a quicker way out of the cash-rich company that has been without a core business for a year.
OSK Investment Bank (OSK IB) Bhd, which is the independent adviser to the Kuok Brothers' offer, said on Thursday the takeover offer was preferable compared with the "uncertainty and lengthy" procedure of receiving proceeds via the route of asset disposals, capital repayment and winding up.
In arriving at its recommendation, OSK IB said it considered that Jerneh Asia was classified under PN16 and PN17 status given that it was without a core business, having disposed off its insurance business.
Last December, Jerneh Asia sold its 80% equity interest in Jerneh Insurance Bhd to ACE INA International Holdings Ltd last December for RM523.2 million cash and had distributed the proceeds in the form of dividends and capital repayments.
To recap, Kuok Brothers had on Oct 31 launched a conditional takeover offer of RM1.45 cash per share for all remaining Jerneh Asia shares it does not own and for all new Jerneh Asia shares which may be issued arising from the exercise of the outstanding warrants.
Kuok Brothers, which holds a direct 37.71% stake in Jerneh Asia, was also looking to acquire the remaining 2.96 million warrants for 45 sen apiece. Kuok Brothers and persons acting in concert (PACs) hold a combined 41.81% equity interest in Jerneh Asia, comprising 102.02 million shares.
Based on a simple calculation, Kuok Brothers — the vehicle of tycoon Robert Kuok Hock Nien — will have to fork out about RM207.19 million for the deal.
Jerneh Asia shares yesterday closed unchanged at RM1.43.
http://www.theedgemalaysia.com/business-news/197145-accept-kuok-brothers-takeover-offer-jerneh-asia-shareholders-told-.html
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Written by Chua Sue-Ann of theedgemalaysia.com
Thursday, 01 December 2011 20:59
KUALA LUMPUR (Dec 1): JERNEH ASIA BHD []'s shareholders have been advised to accept the takeover offer by the group's major shareholder, Kuok Brothers Sdn Bhd, for a quicker way out of the cash-rich company that has been without a core business for a year.
OSK Investment Bank (OSK IB) Bhd, which is the independent adviser to the Kuok Brothers' offer, said on Thursday the takeover offer was preferable compared with the "uncertainty and lengthy" procedure of receiving proceeds via the route of asset disposals, capital repayment and winding up.
In arriving at its recommendation, OSK IB said it considered that Jerneh Asia was classified under PN16 and PN17 status given that it was without a core business, having disposed off its insurance business.
Last December, Jerneh Asia sold its 80% equity interest in Jerneh Insurance Bhd to ACE INA International Holdings Ltd last December for RM523.2 million cash and had distributed the proceeds in the form of dividends and capital repayments.
To recap, Kuok Brothers had on Oct 31 launched a conditional takeover offer of RM1.45 cash per share for all remaining Jerneh Asia shares it does not own and for all new Jerneh Asia shares which may be issued arising from the exercise of the outstanding warrants.
Kuok Brothers, which holds a direct 37.71% stake in Jerneh Asia, was also looking to acquire the remaining 2.96 million warrants for 45 sen apiece. Kuok Brothers and persons acting in concert (PACs) hold a combined 41.81% equity interest in Jerneh Asia, comprising 102.02 million shares.
Based on a simple calculation, Kuok Brothers — the vehicle of tycoon Robert Kuok Hock Nien — will have to fork out about RM207.19 million for the deal.
Jerneh Asia shares yesterday closed unchanged at RM1.43.
http://www.theedgemalaysia.com/business-news/197145-accept-kuok-brothers-takeover-offer-jerneh-asia-shareholders-told-.html
Read also:
Characteristics of Declining Companies and their Value Drivers
Asset divestitures: If one of the features of a declining firm is that existing assets are sometimes worth more to others, who intend to put them to different and better uses, it stands to reason that asset divestitures will be more frequent at declining firms than at firms earlier in the life cycle. If the declining firm has substantial debt obligations, the need to divest will become stronger, driven by the desire to avoid default or to pay down debt.
Big payouts – dividends and stock buybacks: Declining firms have few or any growth investments that generate value, existing assets that may be generating positive cashflows and asset divestitures that result in cash inflows. If the firm does not have enough debt for distress to be a concern, it stands to reason that declining firms not only pay out large dividends, sometimes exceeding their earnings, but also buy back stock.
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