This was also recommended by independent financial advisor SAC Capital and NeraTel’s independent directors
TAIWAN-LISTED Ennoconn Corp’s bid to acquire Nera Telecommunications (NeraTel) at S$0.075 a share is being met with opposition, with the Securities Investors Association (Singapore), or Sias, advising shareholders to reject the offer.
In a statement on Wednesday (Oct 9) evening, Sias’ founder and chief executive David Gerald pointed out that this sentiment was shared by both the appointed independent financial adviser (IFA) SAC Capital – which believed that the price was “not fair and not reasonable” – and NeraTel’s independent directors (IDs).
The word “mandatory” in the offer description does not mean that all shareholders are legally obliged to accept the offer, he added. “Everyone is perfectly entitled to hang on to their shares if they so wish, this being all the more so given the advice of the IFA.”
Furthermore, Ennoconn had emphasised in its offer that it will not revise its price, it does not expect to exercise any rights of compulsory acquisition, and that it intends to retain NeraTel’s listing status.
“SIAS’ recommendation is therefore the same as the IFA and the IDs – shareholders should reject the offer,” said Gerald.
Earlier in September, NeraTel had received an offer from Ennoconn for all the shares in the company it does not own at S$0.075 apiece.
This came after Ennoconn entered a share purchase agreement with Asia Systems for the purchase of close to 193.2 million shares in the issued and paid-up ordinary share capital of NeraTel for S$0.075 per share. That represents nearly 53.4 per cent of the total number of shares in NeraTel.
As Ennoconn acquired over 50 per cent of NeraTel’s shares, a mandatory unconditional cash offer for the remaining shares it does not own was triggered.
The S$0.075 offer price was a 5.1 per cent discount to the volume-weighted average price (VWAP) of the shares traded in the month prior to the offer, and a 3.8 per cent discount to the VWAP of the shares traded in the three-month period prior to the offer.
