Kim Hin non-interested directors, adviser urge shareholders to reject takeover offer
In the latest Independent Advice Circular (IAC) dated Aug 4, NewParadigm Securities Sdn Bhd described the 85 sen per share offer by Kim Hin (Malaysia) Sdn Bhd and Chua Seng Huat as "not fair and not reasonable."
The IAC was filed by Kim Hin to Bursa Malaysia in accordance with takeover rules. It contains the views of the independent adviser appointed to evaluate the offer on behalf of the company's minority shareholders.
The advisory firm noted that the offer price represents a 72.6 per cent discount to the estimated revalued net asset value of RM3.10 per Kim Hin share and a 54.8 per cent discount to the company's unaudited net asset value of RM1.88 per share as at March 31, 2025.
"We are of the opinion the offer is not fair considering the significant discount... notwithstanding the offer price is at a premium to the historical market prices of Kim Hin Shares," NewParadigm said in its evaluation.
"Based on the above, NewParadigm is of the view that the offer is not reasonable," it added.
The board's non-interested directors, Datuk Sim Kheng Boon, Kho Soon Kheng and Aw Tai Hui, said they concurred with the independent adviser's view.
"The non-interested directors... recommend that the holders reject the offer," they said in the circular.
The 85 sen per share cash offer was made to acquire all remaining shares not already held by the joint offerors. As at the latest practicable date, the joint offerors and persons acting in concert hold 63.78 per cent of Kim Hin shares.
The offer is unconditional and remains open until Aug 15, with the potential for extension.
Despite persistent losses, including seven consecutive years in the red up to the financial year ended 2024, the board pointed to underlying asset value and future restructuring potential as reasons to reject the offer.
The IAC also noted that the offerors do not intend to maintain Kim Hin's listing status. If acceptances push their shareholding to 90 per cent or more, they intend to invoke compulsory acquisition provisions under the Capital Markets and Services Act.
"Holders should take note that... the joint offerors will procure Kim Hin to take the requisite steps to withdraw its listing status from the official list," the circular said.
Although the offer provides liquidity in an otherwise thinly traded stock, with average monthly turnover of just 0.04 per cent over the past two years, the board warned that shareholders should monitor market prices and weigh their options carefully.
"Holders should also monitor the prevailing market prices of Kim Hin shares vis-a-vis the offer price before deciding whether to sell... or to accept the offer," the directors said.
Shares of Kim Hin last traded at 85 sen prior to the issuance of the IAC.
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