Wing Tai to takeover all shares of Malaysian counterpart for $94m

It is eyeing to streamline its business.

Wing Tai Holdings announced the unconditional voluntary takeover offer to acquire all issued ordinary shares of Wing Tai Malaysia Berhad (WTM) not already owned by the joint offerors for a cash offer price of RM 1.80 per share or an overall price of RM290.7m ($94m).

According to OCBC Investment Research, the offer price represents a premium to the following last traded price of RM 1.18 per WTM Share on 22 May 2017, the last full trading day prior to the offer.

Here's more from OCBC Investment Research:

The joint offerors now directly hold over 50% of the voting shares in WTM – approximately 66% – hence the offer is not subject to any minimum level of acceptances.

Wing Tai has indicated that they intend to take WTM private by offering the minority shareholders of WTM the opportunity to exit and realize their investments for cash at the offer price. The offer will allow Wing Tai to further explore synergies and integrate their financial and operational resources, which could result in cost savings and improved operational efficiencies.

Given the benefits of a potential WTM privatization and the reasonable offer price (the net asset value per WTM share was RM 2.70 per share as of end June 2016), we see this development as a positive one.