SINGAPORE – Taiwan-listed Ennoconn Corp’s bid to acquire Nera Telecommunications (NeraTel) at 7.5 cents a share is being met with opposition, with the Securities Investors Association (Singapore), or Sias, advising shareholders to reject the offer.
In a statement in the evening of Oct 9, 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.
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, that 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 that of the IFA and the independent directors – that “shareholders should reject the offer”, said Mr Gerald.
Earlier in September, NeraTel had received an offer from Ennoconn for all the shares in the company it does not own at 7.5 cents 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 7.5 cents per share. This represents nearly 53.4 per cent of the total number of shares in NeraTel.
As Ennoconn acquired more than 50 per cent of NeraTel’s shares, a mandatory unconditional cash offer for the remaining shares it does not own was triggered.
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