SIAS points out that the offer price is a 41% discount to the estimated net asset value of 98 cents per share - a figure that would be even higher if a dividend of 5 cents were to be excluded from the offer price.
"If TAL remains sincere in taking the company private, we believe the offeror should consider the RNAV of $1.15 per share as a starting point," says Gerald.
The IFA's report was disseminated as part of the offeror's circular dated April 16.
SIAS, citing the IFA, notes that Sin Heng has been profitable from FY2022 to FY2024 with net profits increasing from approximately $3.65 million in FY2022 to approximately $6.27 million in FY2024.
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Sin Heng has also declared dividends over the last three financial years with dividend yield ranging between 7.61% and 10.99%.
Among other reasons, the IFA’s conclusion to "reject" was based on the price/net asset value (P/NAV) and price/revalued net asset value (P/RNAV) as implied by the offer price of 58 cents is below the median and mean of the P/NAV ratios of selected comparable transactions.
"SIAS would also like to draw attention to the questions raised by SIAS to Sin Heng Heavy Machinery ahead of the company’s AGM to be held on April 29, which have yet to be answered," says Gerald.
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According to TAL earlier, the offer price is final and will not be revised, and that the offer will close on April 30 at 5:30 pm.
"SIAS believes it is in the best interests of all minorities to collectively send a message to the offeror that they will not accept such a lowball offer. No action is required from the shareholders to reject the current offer," says Gerald.
"We believe the company has incurred unnecessary costs to respond to this offer by TAL, which has been deemed not fair and not reasonable.
"While any party has the right to make an offer to shareholders, SIAS urges all offerors to act responsibly and fairly," adds Gerald.
