Accept Ekovest's takeover offer, Iskandar Waterfront City minority shareholders advised

PETALING JAYA: Independent adviser BDO Capital Consultants Sdn Bhd has advised the minority shareholders of Iskandar Waterfront City Bhd (IWCity) to accept the conditional voluntary takeover offer by Ekovest Bhd.
In its independent advice circular, the adviser said that the cash option is “not fair but reasonable” while the share exchange option is “fair and reasonable”.
Based on its analysis, the cash option is “not fair” as the cash consideration of RM1.50 represents a discount of RM1.56 or 51% to its fair value of RM3.06.
However, the share exchange option is “fair” as the exchange ratio ranges from 1.26 to 1.33, indicating that the value of Ekovest shares to be received by the holders represents a premium of about 26% to 33% over the value of the IWCity shares to be surrendered.
Both the cash option and share exchange option are “reasonable” as IWCity shares have not traded above the offer price of RM1.50 per share for the past three years.
The offer price also represents premiums ranging between 9 sen and 22 sen or 6.4% and 17.2% against the five-day, one-month, three-month, six-month and a discount of 35 sen or 18.9% against the one-year volume-weighted average price.
Although the share exchange option is deemed as more favourable, BDO said the decision to be made would rest entirely on the individual risk appetite and the shareholders are advised to be mindful of possible continuous fluctuations in IWCity and Ekovest share prices.
To recap, Ekovest issued a takeover notice on Dec 18, 2017 to buy a 62% stake in IWCity at RM1.50 per share via a cash option or share exchange option. The takeover offer came after Iskandar Waterfront Holdings Sdn Bhd aborted the planned merger with IWCity.
IWCity’s share price rose 3 sen or 2.2% to close at RM1.37 today, while Ekovest fell 1 sen or 1% to 96 sen.