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

Navis Capital offered to acquire all remaining SEG International shares at RM 1.714, warrants at RM 1.214 each

Navis Capital Partners Ltd, which raised its shareholding in SEG International Bhd (SEGi) to 57.62%, has 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 shares of SEGi at RM1.714 cash per share and the warrants 2010/2015 at RM1.214 each.

"In relation to the offer, the board of directors of SEGi will upon its deliberation, announce whether it intends to seek an alternative person to make a take-over offer for the offer shares and offer warrants," it said.

The offer price for the shares was 4.78% below Wednesday's closing price of RM1.80 while the offer price for the warrants was 4.41% below the closing price of RM1.27.

The share offer price was at a price-to-earnings multiple of 12.15 times based on the audited consolidated basic earnings per share for FY ended Dec 31, 2011 of 14.11 sen. It was at a price-to-book multiple of 5.19 times based on the audited consolidated net asset per share as at Dec 31, 2011 of 33 sen.

SEGi said the offeror did not intend to maintain the listing status of SEGi.

On March 29 Navis Capital had acquired 114.80 million shares in SEGi or 21.53% at RM1.713 per share for RM196.63mil and 59.806 million warrants for RM72.484mil at RM1.212 per warrant.

On April 2, it acquired from Segmen Entiti Sdn Bhd 33.49 million shares or 6.28% for RM57.38mil or RM1.713 per share.

On the same day, it acquired from Datuk Chee Hong Leong 180,800 SEGi shares for RM309,168 and 1.25 million warrants for RM1.51mil.

On Wednesday, it acquired from founder and largest shareholder Datuk Seri Clement Hii Chii Kok 18 million warrants for RM21.78mil at RM1.21 per warrant.

Source: www.thestar.com.my