Kuala Lumpur: SP Setia Bhd said Permodalan Nasional Bhd's (PNB) takeover offer "fundamentally undervalues" the property developer and it will seek rival bidders.
It will also ask PNB, its single biggest shareholder with 33.17 per cent, to raise its offer price.
PNB offered RM3.90 per share and 91 sen for its warrants. SP Setia shares last closed at RM3.50, while its warrants ended at 46 sen. The counters were suspended yesterday and will resume trade today.
SP Setia said it reached its decision of not accepting PNB's offer after reviewing external valuations by investment analysts.
The unanimous decisions were taken at an emergency board meeting yesterday, save for Tan Sri Dr Wan Mohd Zahid Mohd Noordin, who is an interested director.
" ... the board, in the exercise of its fiduciary duties to protect the interests of minority shareholders, has decided to seek a competing offer from other interested parties to make an offer to purchase the company's shares.
"The board will also be writing to the offeror to enquire whether they are interested in revising the offer price upwards to reflect a price which is closer to the fair value of SP Setia," it said in a statement to Bursa Malaysia.
The board is also hiring an independent adviser to advise directors and shareholders of SP Setia. It asked shareholders not to do anything until they receive the independent advice circular.
Maybank Investment Bank Bhd (Maybank IB), on behalf of PNB, had earlier yesterday made a conditional offer for the rest of SP Setia.
The condition is that it needs to have more than 50 per cent of SP Setia for the offer to take place. However, it does not plan to take the company private.
Maybank IB said that PNB and parties acting in concert (PACs), as at September 27, held 33.17 per cent stake in the company, with the top shareholder being Skim Amanah Saham Bumiputera with a 20.75 per cent stake, PNB with 8.05 per cent and Amanah Saham Wawasan 2020 with 2.02 per cent.
Property analysts contacted by Business Times were not surprised by SP Setia's rejection, saying the offer price was not compelling enough.
"The offer price minus the price for the warrants should be more than RM4.20, based on the price PNB had paid for the shares over the last six months," said one analyst.
Analysts said it was very unlikely SP Setia president Tan Sri Liew Kee Sin, who holds 11 per cent of SP Setia, will agree to the offer.
But, PNB's decision to make a less than appealing offer and retain the listing status of SP Setia could indicate that its intention was to merely raise its stake.
In an e-mail response to Business Times, an SP Setia official said Liew has decided not to make a statement for now as he waits for full details of PNB's intentions.
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