Fabchem China shareholders advised to reject general offer

Singapore

FABCHEM China's independent directors are recommending that shareholders reject the 15.8 cents a share mandatory conditional general offer by Singapore businessman Henry Wee for all the shares he does not already control, in a circular on Thursday after the market close.

This was after independent financial adviser CEL Impetus Corporate Finance said it was of the opinion that "on balance, the financial terms of the offer are not fair and not reasonable".

The offer closes at 5.30pm on May 3. It is being made via Triple Vision, which is owned by Mr Wee. It currently holds a 39.55 per cent stake in Fabchem China.

In its advice to the independent directors, CEL noted that Fabchem China's closing price was higher than the offer price for more than 118 out of 250 market days, over the 12 months before the last traded day.

With the offer price equal to the last transacted price, it is not within the range of premia for selected comparable transactions, said CEL.

CEL also found that the premiums implied by the offer price over the volume-weighted average price for one, three and six months prior to the offer announcement on March 15 were all "within the range but lower than the mean and median of premia" for selected comparable transactions.

The price-to-net tangible assets ratio of 0.1 time is also not within the range of ratios of selected comparable companies, which is between 1.7 times and 4.9 times.

CEL advised Fabchem China's independent directors to recommend that shareholders reject the offer. The independent directors said they concur with CEL and recommend that shareholders reject the offer.

Fabchem China shares closed down 0.1 Singapore cent or 0.63 per cent at 15.9 Singapore cents on Thursday.