Tuesday, March 26, 2013

If The OFFER is NOT FAIR, how can it be REASONABLE?

On theSunDaily Business: http://www.thesundaily.my/news/645150

  • MBf take-over offer not fair but reasonable
    Posted on 25 March 2013 - 10:12pm
    Last updated on 25 March 2013 - 10:51pm

    PETALING JAYA (March 25 ,2013): The offer for the shares and warrants of MBf Holdings Bhd by a consortium of three companies led by major shareholder Tan Sri Ninian Mogan Lourdenadin, are deemed not fair but reasonable, according to independent adviser Affin Investment Bank Bhd.

    "However, we are of the view that the offer for the shares and the warrants are reasonable based on our evaluation and also taking into consideration that there have been no alternative offers received to date," it said, advising that shareholders and warrant holders accept the offer.

    In an independent advice circular yesterday, Affin Investment said the offer for the shares is not fair, given that the share offer price is below the derived valuation range of MBFH shares of between RM2.45 and RM3.20.

    The offer represents a 30.6% and 46.8% discount to the adjusted net asset range of the group. The offer for the warrant is also not fair, given that the warrant offer price is derived by reference to the share offer price.

    Tor Pte Ltd, Nadin Holdings Sdn Bhd, Impact Action Sdn Bhd and Market Share Investment Ltd through Hong Leong Investment Bank Bhd has proposed to acquire all the remaining shares in MBf Holdings and all the remaining warrants which are not already held by the joint offerors for RM1.70 per share and RM0.70 per warrant

    Affin Investment Bank said the sale of MBF Cards was a loss of significant contribution to the group's profitability.

    The fact that the group's business is largely concentrated in the South Pacific Island, which are perceived as remote markets, following the disposal of the MBF Cards, was also seen as a negative point.

    The heavy losses incurred by the group's shipping segment since FY ended Dec 31, 2010 which had drained the group's cash reserves, was another.

    MBf's revised offer will be open for acceptance until 5pm on April 3.
Incomprehendable advice!

If an offer is not fair, then it only means it is not fair.

Think about it.

Does it make sense to accept an offer that it is not offer?

Does it?

If it doesn't make sense, how then can it be reasonable?

Oh my England!!!!!!!!!!!!!!

No wait... I forgot. This is the stock market. The minority shareholders is there to be screwed. And what better way to screw the minorities than to have investment advisers making advice such as not fair but reasonable!!!!