KUALA LUMPUR (Sept 14): Daibochi Bhd rose as much as 31 sen or 12.97% to RM2.70 this morning after its major shareholder Scientex Bhd planned to privatise the company.
At 9.56am, the counter had pared some gains at RM2.69, still up 30 sen or 12.55%.
The counter, which was the fourth top gainer this morning, saw five million shares traded.
Yesterday, Scientex proposed to acquire all the remaining shares and warrants of Daibochi that it does not already own at an offer price of RM2.70 per share and 32 sen per warrant, amounting to RM345.3 million in total.
The proposed exercise entails buying 124.78 million Daibochi shares which represent 38.12% of its total issued shares excluding treasury shares, and 26.14 million Daibochi warrants, representing 95.75% of the outstanding warrants.
Scientex does not intend to maintain the listing status of Daibochi.
It said the acquisition will enable greater flexibility to implement strategic plans for the enlarged group to realise long-term growth potential of the global flexible packaging industry.
MIDF Research said in a note today the offer price per share translates into an implied valuation of Daibochi of about RM883.9 million, with an implied price-earnings ratio (PER) of 14.7 times.
“To compare, Daibochi’s market capitalisation stood at RM782.4 million based on its last closing price or PER of 13 times. Nonetheless, both the offer and current prices are at a discount to its two-year historical multiple of 15.2 times,” it said.
The research house made no changes to its forward earnings estimates for Daibochi.
It also maintained its "buy" call on Daibochi but revised its target price (TP) to RM2.70 per share from RM2.98 previously, which is equivalent to the privatisation offer price.