26 April 2012

Kenanga Research recommends SEG International shareholders to reject Navis Capital offer to acquire all remaining shares at RM 1.714, target price RM2.41

(SEG opening stock price today (26.4.2012) was RM 1.81

Shares of SEG International Bhd fell to a low of RM1.72 on Thursday following the unattractive offer made by Navis Capital Partners Ltd at RM1.714 cash.

At 11.02am, the shares were trading at RM1.74. There were 785,400 shares transacted at prices ranging from RM1.72 to RM1.75.

The warrants slipped two sen to RM1.20. There were 4,000 shares done at prices ranging from RM1.20 to RM1.24.

The FBM KLCI slipped 0.76 of a point to 1,578.59. Turnover was 549.57 million shares valued at RM328.37mil. Losers beat gainers 298 to 181 while 279 stocks were unchanged.

Navis Capital, which raised its shareholding in SEG International Bhd to 57.62%, had on Wednesday served a notice of unconditional takeover offer for the outstanding shares.

Navis Capital said on Wednesday it was offering to acquire all the remaining 25 sen of SEGi at RM1.714 cash per share and the warrants 2010/2015 at RM1.214 each.

Kenanga Investment Research said the offer price at RM1.714 implied a price-to-earnings ratios of 10.4 times and 9.0 times to its estimated FY12 and FY13 earnings per share.

"This offer price is relatively cheap compared to our targeted FY12 and FY13 PERs of 14.6 times and 12.8 times respectively. As such, the offer price is unattractive in our view, given that it is only 71% of our target price of RM2.41 and 77% of the consensus target price of RM2.23.

"Thus, we recommend shareholders to reject the offer," it said a note to clients.

Source: www.thestar.com.my

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