KUALA LUMPUR: Dutch company Jacobs Douwe Egberts BV’s (JDE) RM1.47 billion offer to take over OldTown Bhd represents good value for investors, said analysts.
The offer price of RM3.18 per share is higher than their estimated value for OldTown’s shares.
With the offer price already having 10.41 per cent premium to OldTown’s last traded price of RM2.88 on Friday, analysts are unanimous that the offer is fair and reasonable.
Hong Leong Investment Bank said the offer price is 18.6 times of its estimated earnings per share for OldTown’s financial year 2019.
“The offer price is nine per cent above its estimated fair value of RM2.91 per share. We advise minorities to accept the offer made by JDE,” it said.
AllianceDBS Research said the offer price is reasonable and fair as RM3.18 is in line with its RM3.15 target price for the group.
The firm maintained its “buy” call on OldTown and urged investors to accept the offer once the preconditions are met.
OldTown announced on Monday that it had received a pre-conditional cash offer for all the issued ordinary shares of the company by Jacobs Douwe Egberts Holdings Asia NL. B.V, an indirect wholly-owned subsidiary of JDE.
The offer will be subject to the preconditions of green lights obtained from the Competition Commission of Singapore without conditions or on conditions reasonably satisfactory to JDE, and the offer does not violate any other appropriate anti-trust authorisations and if yes, approvals will be obtained from the relevant authorities going forward.
The offer will not be made to shareholders of Oldtown until the preconditions highlighted above have been satisfied latest by August 11 next year.
JDE intends to privatise OldTown and will not maintain its listing status on Bursa Malaysia.