KUALA LUMPUR (Dec 26): Tradewinds (M) Bhd (TWM) roared in early trade following the announcement by the company that firms controlled by its key shareholder Tan Sri Syed Mokhtar Al-Bukhary are offering RM9.30 per share to privatise the company.
The offer price represented RM1.55 or 20% premium over TWM's last traded price of RM7.75 per share, according to the notice.
At 9.28 am today, the stock rose RM1.10 or 14.2% to RM8.85 after hitting a high of RM8.99 earlier. With trades of 1.07 million shares, it was one of the most active stocks at opening calls.
But its associated companies, Tradewinds Plantations Bhd (TWP) and Padiberas Nasional Bhd (Bernas), fell instead.
TWP share gave up 25 sen or 6% to RM3.98 on volume of 43,000 shares while Bernas lost 6 sen or 1.8% to RM3.25 on volume of 54,000 shares.
The announcement on Monday also said the privatisation offer will trigger a mandatory general offer (GO) for all the shares in TWP and Bernas, once the privatisation of TWM materialises.
The joint offerors will offer to acquire all the remaining TWP's shares they not yet own at RM4.03 per share, while minority shareholders of Bernas will be offered a cash consideration of RM3.25 per share.
“It is obvious that Tradewinds will jump today as the offer price is very much higher than the last traded price. The shares of TWP and Bernas will have to fall as the intended offer is lower than their last traded prices,” said a dealer.
Hong Leong IB Research, while noting that the GO price of RM4.03 is 4.7% lower than the last traded price of RM4.23, said it believes the offer price is “fair” given the near-term weak earnings outlook arising from the weak palm oil price prospects.
“Hence, we advise investors to take the offer. Its target price is raised from RM3.56 to RM4.03, which is in line with the GO price. Recommendation is upgraded from Sell to Hold following the upward adjustment to TP,” it said in a note.