KUALA LUMPUR: Tan Sri Ong Leong Huat has suffered a setback in his bid to take OSK Holdings Bhd private after his offer was described as “not fair” and “not reasonable” by the independent adviser for the corporate exercise.
Affin Investment Bank Bhd said the offer price for OSK shares is “not fair” as it is below the fair value of the company.
Affin had based the fair value of OSK shares using the revised net asset value (RNAV) concept.
OSK is estimated to have a RNAV of between RM1.88 and RM2.15 per share.
The net asset per share of OSK, meanwhile, stands at RM2.57 a share, meaning that the offer price by Ong is based on an implied priceto-book ratio (PBR) of 0.65 times.
“This is lower than the lowest unaudited PBR of comparable companies of 1.0 times and also lower than the average unaudited PBR of comparable companies of 1.57 times,” Affin said in a statement to OSK shareholders.
To recap, Ong is seeking to take OSK private through OSK Equity Holdings Sdn Bhd, which after a series of corporate deals, has a stake in OSK above the 33 per cent cut-off point.
OSK Equity is 99 per cent controlled by Ong, who is also the managing director of OSK.A party that breaches the 33 per cent cut-off point in ownership is required by law to make a mandatory offer for the shares it does not already own.
Read more: OSK takeover offer not fair, says Affin at BTimes