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09-11-2015, 01:18 PM
Hi Jacmar,
There are few deals that are deemed by the IFA as "not fair but is reasonable" that eventually goes through. The most recent one being Lizhong Wheel, whereby the offer undervalues the company as it is at a deep discount of 41.9% to the revalued NTA per Share but it is reasonable as the Offer Price is at a significant premium above the historical traded price of the Shares over the last one year prior to the Offer Announcement Date.
Ultimately, it is an uphill task for minorities to block takeover offers, unless we have a big block of shareholders holding more than 5% who are willing to fight for a better offer. IFA report is also important as it will give the independent directors something to work on and make their recommendation to shareholders. If the IFA report is not favourable, then minorities will have the bullet to substantiate their arguments and put more pressure to the board to come out with a better offer.
There are few deals that are deemed by the IFA as "not fair but is reasonable" that eventually goes through. The most recent one being Lizhong Wheel, whereby the offer undervalues the company as it is at a deep discount of 41.9% to the revalued NTA per Share but it is reasonable as the Offer Price is at a significant premium above the historical traded price of the Shares over the last one year prior to the Offer Announcement Date.
Ultimately, it is an uphill task for minorities to block takeover offers, unless we have a big block of shareholders holding more than 5% who are willing to fight for a better offer. IFA report is also important as it will give the independent directors something to work on and make their recommendation to shareholders. If the IFA report is not favourable, then minorities will have the bullet to substantiate their arguments and put more pressure to the board to come out with a better offer.