TECHBASE Industries Bhd’s (formerly Prolexus Bhd) proposed takeover of South Malaysia Industries Bhd (SMI) will now proceed without any legal implications after the court had on today (Sept 5) refused to grant an ad interim injunction order in relation to the on-going mandatory general offer (MGO) to acquire SMI shares.
Additionally, the presiding Judicial Commissioner, Noor Hisham Ismail, further maintained the hearing date for the interim injunction application, namely Oct 27, and the earlier directions on the filing of affidavits and submissions.
“This refusal to grant the interim injunction means that the takeover offer of 45 sen/share initiated by Techbase’s subsidiaries Honsin Apparel Sdn Bhd and HiQ Media (M) Sdn Bhd as well as Target 1 Sdn Bhd, continues to progress without any immediate legal roadblocks,” an industry insider told FocusM.
“The offer is valued at over RM47 mil and the consortium now controls more than half of the issued shares in SMI.”
As per its filing to Bursa Malysia, Techbase said its solicitors only received a notification via e-mail from the court at 4.34pm yesterday (Sept 4) that a hearing would be conducted at 12.15pm today (Sept 5) by way of Zoom.
Also at 9.52pm yesterday (Sept 4), the apparel manufacturer received a letter from Messrs Lim Chee Wee Partnership who acted on behalf of the Securities Commission Malaysia (SC) that it had sought the court’s permission to appear as amicus curiae (a friend of the court) despite objections from the plaintiff.
Recall that on July 15, Mah Sau Cheong – a substantial shareholder of SMI – sued Techbase and YB Ventures Bhd as well as their subsidiaries over alleged share manipulation at SMI.
Mah claimed this has adversely affected all SMI shareholders, including himself, who holds a 7.65% stake amounting to 16.06 million shares.
He is demanding RM24.08 mil in compensation for the lost opportunity to receive a MGO for his SMI shares at RM1.50/share. Alternatively, he seeks RM17.02 mil for the missed opportunity to receive an MGO at RM1.06/share.
As another option, Mah requested that the defendants jointly and severally pay general damages which will be assessed by the Johor High Court for depriving him of the chance to receive an MGO for his shares in SMI.
At the close of today’s trading, SMI was unchanged at 44 sen with 25,100 shares traded, thus valuing the company at RM92 mil. – Sept 5, 2024
