Cordlife offer for Stemlife ‘fair, reasonable’: Mercury Securities

PETALING JAYA: The takeover offer by Cordlife Group Ltd of all the remaining shares it does not own at an offer of 45 sen per share in Stemlife Bhd is “fair and reasonable”, according to independent adviser Mercury Securities.
Mercury Securities in a circular recommended shareholders “accept” the offer, which will remain open for acceptances till Dec 28.
In a filing with Bursa Malaysia yesterday, StemLife said Mercury Securities had given a fair and reasonable opinion on the offer by Singapore-listed Cordlife, as the offer price represents a premium of 4.65% to 7.14% over the fair value range of the shares.
Last month, Cordlife, a major shareholder, made a conditional takeover offer for Stemlife at 45 sen per share.
The takeover offer was triggered after Cordlife crossed the 33% threshold with the acquisition of three million shares or 1.21% in the company.
Based on the sum-of-parts-value methodology, Mercury Securities had come up with a fair value ranging from RM105.1 million to RM107.3 million, or 42 sen to 43 sen per share.
It added that the offer price is equal or higher than the closing market price of StemLife shares for 85% of the total market days over the past five years, and represents a premium of between 10% and 21.79% over the five-day, one-month, three-month, six-month and one-year volume weighted average market price of StemLife shares up to Nov 12, being the last full trading day prior to the take over offer.
Mercury Securities deemed the offer reasonable, considering StemLife’s shares are illiquid, with a simple average monthly trading volume-to-free float for the past one year up to October of 2.88%, compared with the Kuala Lumpur Services Index of 12.92% in the same period.
“The offer is also reasonable, as there is no competing take-over offer for the shares, and the non-interested directors do not intend to seek another person to make a take-over for the shares,” said Mercury Securities.
Mercury Securities advised shareholders to closely monitor the market prices of the Stemlife shares and information and announcements in relation to the offer before making a decision.
“You may consider disposing of your Stemlife shares in the open market in the event that the market price of the Stemlife shares is trading higher than the offer price after taking into consideration the associated transaction costs involved,” it added.