Reject takeover offer, Rex Industry shareholders told

PETALING JAYA: Independent adviser MainStreet Advisers Sdn Bhd deems the takeover offer for Rex Industry Bhd by its directors Darmendran Kunaretnam and Chee Cheng Chun at RM1.65 per share as "reasonable but not fair".
Thus, the independent adviser recommends that shareholders reject the takeover offer.
In an independent advice circular filed with the stock exchange last Friday, MainStreet Advisers said the "not fair" view outweighs the "reasonable" view as the offer price represents a substantial discount of 35.29% to the estimated revalued net asset valuation (RNAV) per Rex share of RM2.55 as at Dec 31, 2016.
However, it said the shareholders who wish to exit their investments in the group can consider selling the shares in the open market if they are able to obtain a price higher than the offer price, net of transaction cost.
Shareholders should note that the share price of Rex has been trading above the offer price subsequent to the announcement of the notice on Feb 7, 2017 and up to the LPD, it noted.
"However, the decision to be made will rely entirely on the holders' risk appetite and specific preference as well as their expectation of the future performance of Rex under the offeror.
"Holders should also be mindful that continuous fluctuation in the market price of Rex shares might happen prior to the closing date," it said.
MainStreet Advisers advised the shareholders to closely monitor the market prices and information/announcements in relation to the offer before making any decision.
Rex is involved in the manufacturing and distribution of canned food, frozen foods and drinks.