JARDINE Matheson Holdings (JMH) does not intend to raise its offer price of US$33 per share for the about 15 per stake in Jardine Strategic Holdings (JSH) that it does not own or US$5.5 billion for the buyout, the conglomerate told The Business Times (BT).
Despite its offer price being criticised for being lowball and prompted shareholders to consider legal action to have it appraised in Bermuda, Jardine Matheson insists that US$33 is "fair value" as both the Jardine Strategic Transaction Committee and Jardine Matheson have been "rigorous" in their assessment.
A Jardine Matheson spokesperson said: "We remain firmly of the view that JMH has offered fair value for the JSH shares. If appraisal rights were to be exercised in the Bermuda court, the court will rigorously examine the question of fair value, taking account of all relevant factors. Shareholders will have seen the factors taken into account by the Jardine Strategic Transaction Committee (set out in the circular) which demonstrate that it adopted a similarly rigorous approach before concluding that the JMH offer is fair.
"JMH undertook its own comprehensive analysis before making its offer. In such circumstances, whilst we are hopeful that lengthy, costly court proceedings will not prove to be necessary, we are confident that the robustness of the processes which have been undertaken and the fairness of the acquisition price will be vindicated in any proceedings."
United First Partners' head of Asian research Justin Tang has spearheaded an initiative to seek appraisal of fair value in Bermuda, rallying individual dissenting shareholders to join his institutional clients in the legal proceedings.
He told BT that there are two to three family offices holding US$15 million in total shareholding that have indicated interest to challenge the US$33 offer price - more than 40 per cent below net asset value.
Around the time when the initiative was announced on March 18, Jardine Strategic's share price started to rise past the offer price and hit a high of US$34.25 on March 23. It was trading 0.51 per cent lower at US$33.10 at 11am on Monday.
Should Jardine Strategic's fair value appraised by the Bermuda court to be greater than the acquisition price of US$33, Jardine Matheson is to pay dissenting Jardine Strategic shareholders the difference between the appraised value and the acquisition price within a month of the court's decision.
However, should the court value it to be equal or lower than the acquisition price, the dissenting Jardine Strategic shareholders will be entitled only to the acquisition price.
The Securities Investors Association (Singapore), which is arranging for individual shareholders of Jardine Strategic to connect with Mr Tang, pointed out that dissenting shareholders need to convert their shares from The Central Depository, or CDP, into certificated form before they are able to enforce their legal rights, and they have to do this by 5pm on March 30.
Dissenters can register on this platform by 5pm on March 30: http://bit.ly/3bUMR7u