PETALING JAYA: Property developer Tanco Holdings Bhd’s independent directors and adviser have advised minority shareholders to reject the takeover offer by the company’s major shareholders.

Last month, Tanco said the joint offerers were Datuk Seri Tan Jing Nam, Andrew Tan Jun Suan and Datuk Tan Lee Sing. They own a collective 34.1% stake in Tanco and have offered to take over Tanco at 8.12 sen a share and RM1.624 per redeemable convertible note (RCN). The joint offerers intend to maintain the listing status of Tanco.

In a circular posted to the exchange, independent adviser BDO Capital Consultants Sdn Bhd deemed the proposed takeover offer as “not fair but reasonable”.

“Although the offer can be deemed reasonable, BDO is of the view that the ‘not fair’ view outweighs the ‘reasonable’ view, as the share offer price and RCN offer price represent a significant discount of 73.4% against the estimated fair value per offer share of 30.54 sen and the estimated fair value per offer RCN of RM6.108, respectively

BDO pointed out that Tanco shares were relatively illiquid and, thus, shareholders (especially those holding a significant number of Tanco shares) may have limited opportunities, or may take significant time to realise their investments in Tanco in the open market even if they wanted to.

“Considering the illiquidity of the Tanco shares, the offer represents an avenue for shareholders, especially those holding a significant number of the offer shares, to realise their investment in the offer shares in cash at the offer prices in an efficient manner without incurring transaction costs such as brokerage, clearing fees and Malaysian stamp duties,” it said, adding that there were no competing takeover offers for Tanco.

BDO noted that the joint offerers intend to maintain the listing status of Tanco, and therefore the shares of Tanco would remain traded on Bursa Securities. Hence, shareholders will still be able to participate in the trading of Tanco shares, and in the event that Tanco declares any dividends in the future, shareholders are entitled to receive them.

However, shareholders should note that in the event that Tanco is unable to meet the public spread requirement, Tanco may be removed from the official list and its shares may become illiquid securities.

This is because they would not be traded on Bursa Securities and there may not be an active or ready market for the unlisted Tanco shares.

Tanco shares closed half-a-sen lower at eight sen yesterday.

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