Perak Corp reject Amin's RM3.50’s offer

PETALING JAYA: Perak Corp Bhd (PCB) has rejected Amin Halim Rasip’s offer to buy its 5% stake in Integrax Bhd saying that Tenaga Nasional Bhd's (TNB) offer is "superior" to his despite him offering a higher price.
It said that Amin’s offer of RM3.50 a share for a 5% stake in the port operator constitutes “a clear strategic risk” if it plans to dispose its entire, albeit reduced, equity interest in Intergrax on a piece-meal basis.
In a stock exchange filing yesterday, PCB stated that “…the board is of the view that the Amin's offer does not constitute a superior offer as compared to TNB offer. Therefore the board wishes to announce that after careful examination of the terms, conditions and implications of the Amin offer, the board has resolved to reject the aforesaid offer.”
PCB further reaffirmed its position to recommend to its shareholders to vote in favour of TNB at its forthcoming EGM.
It said that Amin’s offer to buy 15.04 million shares in Integrax from PCB’s unit, Taipan Merit Sdn Bhd, for RM52.64 million will cut PCB’s stake in Integrax to 10.74% from 15.74%.
Although Amin’s offer was 25 sen better than TNB's revised offer of RM3.25, PCB said the offer was for only a 5% equity interest in Integrax as compared to TNB’s offer, where else TNB's offer would enable it to dispose of its entire stake in Integrax.
“In this regard, notwithstanding the offer of RM3.50 for each Integrax share under the Amin’s offer is higher than the TNB offer, the terms of the Amin offer do not provide for the disposal of the entire PCB’s interest in Integrax.
In reaching its conclusion to reject Amin’s offer, PCB added that it was reasonable to expect that the liquidity of Integrax shares and public shareholding spread could further be adversely affected moving forward as both offerors have been purchasing Integrax shares in the open market.
This it said, may constrain PCB’s ability to sell the remaining 10.74% block at a later date.
PCB also noted that should TNB’s offer become unconditional where it secures not less than 50% equity interest in Integrax, the remaining 10.74% block will hold less strategic value.
“This will dilute PCB’s bargaining position should it decide to dispose the aforesaid remaining block,” it said.
PCB further noted that said that there was no assurance that PCB would be able to dispose its entire 10.74% block at the current offer price of RM3.25 per Integrax share or higher at a later date since the share price has never exceeded the offer price of RM3.25 for the past 10 years.
It also pointed out that Amin’s offer comes with a three lock out period for Taipan Merit's remaining stake in Integrax “is administratively cumbersome to PCB and does not serve its interest.”
PCB also made it known that if disposes its entire Integrax stake to TNB, it does not tantamount to the group exiting from the Lumut Port operations for which it has a significant presence via its 50% plus 1 share subsidiary, Lumut Maritime Terminal Sdn Bhd (LMT).
“Moving forward, PCB will continue to play a key role in developing Lumut port and its hinterland for the benefits of its shareholders including the State of Perak.
PCB also believes that the proposed disposal to TNB will not compromise efforts to renegotiate the terms of operation and maintenance agreement (OMA) entered into between LMT and Lekir Bulk Terminal Sdn (LBT) when it expires on May 20, 2017.
“From Integrax’s perspective, PCB will be deemed a related party which has an interest on both sides of the transaction. Consequently, PCB’s board representatives in Integrax must abstain from deliberation and voting in respect of the resolutions pertaining to the aforesaid transaction in the board meeting,” it said.
Following PCB’s announcement, Amin in a email reply to SunBiz said his offer "is a national service effort to make Perbadanan Kemajuan Negeri Pahang (PKNP) and the board of PCB realise, that selling all the State's interest in Integrax, and hence in the strategic LMT and LBT assets at a cheap price, would be arguably a reckless decision, not in the best interests of the citizens of Perak and shareholders of PCB who have a direct and indirect stake in the crucial and strategic assets of LBT and LMT , which are a cash cow and golden goose for state coffers.
He added that it was in the best interests of all PCB shareholders, that they and their board , seek and consider all offers available from the market.