Rex Industry

INDEPENDENT adviser cfSolutions has advised minority shareholders of Rex Industry Bhd to reject the conditional mandatory takeover offer by controlling shareholder ETA Industries Sdn Bhd, calling it “not fair and not reasonable.”

ETA is offering 10 sen per share and 0.5 sen per warrant, despite owning 52.22% of Rex shares and 39.18% of its warrants.

cfSolutions said the offer price is 37.5% below its estimated fair value of 16 sen per share, while the warrant offer is 83.3% lower than its estimated worth.

While ETA does not intend to delist Rex, the stock’s low trading liquidity  – at 1.69% versus the sector average of 5.97% – raises concerns for minority investors.

The advisers also noted that ETA does not plan to compulsorily acquire remaining shares even if it crosses the threshold to do so.

Rex’s independent directors concurred with the advice and recommended shareholders reject the offer, which remains open until July 25.

Rex, a canned food and beverage manufacturer with factories in Malaysia and Indonesia, saw its shares closed up 1 sen at 11.5 sen, valuing the company at RM75.6 million. — TMR

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