Cordlife offer for StemLife fair and reasonable: Adviser

PETALING JAYA: Cordlife Group Ltd’s unconditional takeover offer for StemLife Bhd at 57.5 sen per share is “fair and reasonable”, according to the latter’s independent adviser, Mercury Securities Sdn Bhd.
In an independent advice circular last Friday, Mercury Securities recommended that StemLife shareholders accept the offer.
Recall that Cordlife, which holds a controlling stake of more than 90% equity interest in StemLife, made an unconditional takeover offer to acquire all the remaining ordinary shares of 10 sen each for a cash offer price of 57.5 sen per share.
The offer remains open for acceptances until Dec 22 and Cordlife does not intend to maintain the listing status of StemLife on the ACE Market of Bursa Malaysia.
Mercury Securities said the offer is fair as the 57.5 sen is higher than and represents a premium of about 25-27.78% over the range of fair value per StemLife share of 45 sen to 46 sen.
The firm opined that StemLife shares are illiquid, with a simple average monthly trading volume-to-free float for the period from March 2016 to October 2016 of 1.1%.
“Considering the illiquidity of the StemLife shares, the offer represents an avenue for the holders to realise their investment in the shares in cash at the offer price,” it said.
“We are of the view that the offer is reasonable as it provides an exit opportunity to the holders to realise their investment in the StemLife shares in cash at the offer price prior to the suspension in trading of the StemLife shares and thereafter, the delisting of StemLife,” it added.