Thakral shareholders urged to reject HLA offer

Sep 13, 2006
The Business Times

THAKRAL Corporation's independent financial advisers have advised shareholders to reject Hong Leong Asia's mandatory takeover offer for the company.

In a circular to shareholders yesterday, Thakral's board included the recommendation of Rabo bank International, the independent financial advisers to Thakral's independent directors. The circular quoted Rabobank as saying that it saw 'generally insufficient compelling reasons to recommend the full acceptance' of Hong Leong Asia's offer.

Rabobank has advised Thakral's independent directors to recommend that the company's shareholders and bondholders reject the takeover offer.

Rabobank said its recommendation is largely premised on the shareholders and bondholders 'who take a long-term view of their investment in the company (and) are confident of the prospects of the company in the long term' and 'the substantial undervaluation of the offer price against the company's adjusted NTA per share'.

Rabobank pointed out that Hong Leong Asia's offer price of eight cents for each Thakral share is at a 24.53 per cent discount to Thakral's adjusted NTA per share of 10.6 cents, as at June 30, 2006. Hong Leong Asia made the conditional offer for Thakral last month, for the 63.3 per cent it does not already own. Its offer is conditional upon it getting more than 50 per cent of the company.

Thakral shares closed unchanged at 9 cents yesterday, topping the volumes list with almost 43 million shares traded.