PETALING JAYA: TA Enterprise Bhd’s application to withdraw its conditional voluntary take-over offer of TA Global Bhd has been rejected by the Securities Commission (SC) after having considered the justifications provided on a holistic basis, the company said in its Bursa filing.
This means the takeover will proceed, but it is not clear if the privatisation exercise will still be undertaken.
Initially, TA Enterprise proposed acquiring up to 39.83% or 2.12 billion ordinary shares of TA Global in a bid to take the company private.
The proposed offer price was 28 sen per share or a share swap based on an exchange ratio of 0.4211 new ordinary share in TA Enterprise to be issued at 66.5 sen each for every TA Global share surrendered.
However, on May 6, the company submitted an application to the SC for its approval to abort the privatisation exercise, after taking into consideration amongst others, the adverse impact of the Covid-19 pandemic to the financial performance of TA Global and its subsidiary for the financial year ending Dec 31.
It explained this was due to the temporary suspension of operations of several hotels of the group in the months of March and April.
In a separate statement, the SC said any announcement of a firm offer should be made only after careful and responsible consideration, as once the announcement on the offer is made, the market in the shares of the relevant company is likely to be supported by the offer price.
“Hence, an offeror or any person who proposes to make an acquisition which may lead to an obligation to make a take-over offer, must ensure that he is able to implement the offer in full. As the offer was announced at a time when Covid-19 was already known, TA Enterprise and its board should have taken into consideration the risks before making the announcement since they would be in a position to evaluate the prospects of TA Global’s business,” it said.
The SC’s decision in rejecting TA Enterprise’s application to withdraw the conditional voluntary offer for the remaining voting shares in TA Global will mean that TA Enterprise’s non-interested shareholders will get to decide whether to vote for or against its proposal at their extraordinary general meeting.
