KUALA LUMPUR: Kenanga Investment Bank Bhd deems the pre-conditional voluntary conditional takeover offer at RM3.30 a share received by Unisem (M) Bhd as fair and a win-win for all parties involved.
Unisem had on Wednesday received a pre-conditional announcement of a takeover offer from executive chairman and managing director John Chia Sin Tet and Chinese firm Tianshui Huatian Electronics Group Co Ltd (TSHT).
The offer for 550.56 million shares representing 75.72 per cent of Unisem, is worth RM1.82 billion.
“While Unisem would complement TSHT with its vast network of customers in Europe and North America Tianshui Huatian Technology Co (TSHT) which has a significant presence in China would enable Unisem to expand more rapidly in Chengdu; a positive synergy that would be created, in our view.
“Moreover, TSHT’s fan-out technology which is called eSiFO, could complement Unisem’s strategy that is to venture into FOWLP (an enhance version of standard wafer-level packaging, using fan-out technology), beyond its niche which is in WLCSP (Wafer-Level Chip-Scale Package),” it said in a note today.
Kenanga said TSHT, being among the largest outsourced semiconductor assembly and testing (OSAT) players worldwide, was the only listed company in Western China in the packaging industry.
Its revenue was ranked top five within the OSAT space in China in recent years.
“We deemed the offer price of RM3.30 per share (after taking into account these re-rating factors) to be fair as the implied 16.2x financial year 2019 price earnings ratio (PER), at 1.0x standard deviation above its five-year average forward PER, is also in line with the Malaysian’s OSAT current two-year forward PER.
“Post announcement, we made no changes to our earnings estimates,” it said.