Accept offer for KHSB: Kenanga

PETALING JAYA (Oct 22, 2013): Kumpulan Darul Ehsan Bhd's (KDEB) takeover bid for Kumpulan Hartanah Selangor Bhd (KHSB) at 83.6 sen per share has been deemed "not fair but reasonable", according to independent adviser Kenanga Investment Bank Bhd (KIBB).

Considering the merits of reasonableness outweigh the demerits associated with the offer price's 42.58% discount to the fair value attributable to each KHSB share of RM1.46, KIBB said it is recommending shareholders to accept the offer made by KDEB for shares it does not own in its property arm.

KDEB, the investment arm of the Selangor state government, holds 88.7% of KHSB shares as at Oct 16, 2013.

In a circular to KHSB shareholders issued yesterday, KIBB believes the offer represents an exit opportunity for KHSB shareholders to realise their investment in the company at a premium over the historical closing market prices of KHSB shares and is above the highest traded price of KHSB in the past two years.

KIBB also noted that the overall prospects of KHSB Group is going to remain subdued due to its relatively low cash balance, coupled with significant borrowings in acquiring additional land banks and/or undertaking new development projects to sustain its earnings and also enhance the group's intrinsic value further.

KDEB has said that it does not intend to maintain the listing status of KHSB once the takeover offer is accepted.