Internet Marketing Malaysia-LINs Advertising & Marketing Sdn Bhd
IDEAL JACOBS (MALAYSIA) CORPORATION BHDidealjacobs.listedcompany.com/newsroom/IAC.pdfWIDAD BUSINESS...
Transcript of IDEAL JACOBS (MALAYSIA) CORPORATION BHDidealjacobs.listedcompany.com/newsroom/IAC.pdfWIDAD BUSINESS...
THIS INDEPENDENT ADVICE CIRCULAR (“IAC”) IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. YOU SHOULD READ THIS IAC IN CONJUNCTION WITH THE OFFER DOCUMENT DATED 5 MARCH 2018 ISSUED BY KENANGA INVESTMENT BANK BERHAD ON BEHALF OF WIDAD BUSINESS GROUP SDN BHD (“OFFEROR”) WHICH HAS BEEN SENT TO YOU. If you are in any doubt as to the action to be taken in relation to the Offer (as defined herein), please consult your stockbroker, solicitor, bank manager, accountant or other professional advisers immediately. If you have sold or transferred all your Offer Shares (as defined herein), you should at once hand this IAC to the purchaser or stockbroker or agent through whom you effected the sale or transfer for onward transmission to the purchaser or transferee of such Offer Shares. Pursuant to Rule 11 of the Rules on Take-overs, Mergers and Compulsory Acquisitions, the Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of this IAC. However, such notification shall not be taken to suggest that the SC agrees with our recommendation or assumes responsibility for the correctness of any statements made or opinions or reports expressed in IAC.
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
INDEPENDENT ADVICE CIRCULAR TO THE HOLDERS OF THE OFFER SHARES IN RELATION TO THE UNCONDITIONAL MANDATORY TAKE-OVER OFFER
BY
WIDAD BUSINESS GROUP SDN BHD
(Company No. 602380-P) (Incorporated in Malaysia under the Companies Act, 1965)
THROUGH
KENANGA INVESTMENT BANK BERHAD
(Company No. 15678-H) (A Participating Organisation of Bursa Malaysia Securities Berhad)
TO ACQUIRE ALL THE REMAINING ORDINARY SHARES IN IDEAL JACOBS (MALAYSIA) CORPORATION BHD (“IDEAL JACOBS”) AS WELL AS ANY NEW ORDINARY SHARES ARISING FROM THE EXERCISE OF OPTIONS GRANTED PURSUANT TO IDEAL JACOBS’ EMPLOYEE SHARE OPTION SCHEME NOT ALREADY HELD BY THE OFFEROR (“OFFER SHARES”) FOR A CASH CONSIDERATION OF RM0.23 PER OFFER SHARE (“OFFER”)
Independent Adviser
M&A SECURITIES SDN BHD (15017-H) (A Wholly-Owned Subsidiary of Insas Berhad)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
This Independent Advice Circular is dated 15 March 2018
THIS INDEPENDENT ADVICE CIRCULAR (“IAC”) IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. YOU SHOULD READ THIS IAC IN CONJUNCTION WITH THE OFFER DOCUMENT DATED 5 MARCH 2018 ISSUED BY KENANGA INVESTMENT BANK BERHAD ON BEHALF OF WIDAD BUSINESS GROUP SDN BHD (“OFFEROR”) WHICH HAS BEEN SENT TO YOU. If you are in any doubt as to the action to be taken in relation to the Offer (as defined herein), please consult your stockbroker, solicitor, bank manager, accountant or other professional advisers immediately. If you have sold or transferred all your Offer Shares (as defined herein), you should at once hand this IAC to the purchaser or stockbroker or agent through whom you effected the sale or transfer for onward transmission to the purchaser or transferee of such Offer Shares. Pursuant to Rule 11 of the Rules on Take-overs, Mergers and Compulsory Acquisitions, the Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of this IAC. However, such notification shall not be taken to suggest that the SC agrees with our recommendation or assumes responsibility for the correctness of any statements made or opinions or reports expressed in IAC.
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
INDEPENDENT ADVICE CIRCULAR TO THE HOLDERS OF THE OFFER SHARES IN RELATION TO THE UNCONDITIONAL MANDATORY TAKE-OVER OFFER
BY
WIDAD BUSINESS GROUP SDN BHD
(Company No. 602380-P) (Incorporated in Malaysia under the Companies Act, 1965)
THROUGH
KENANGA INVESTMENT BANK BERHAD
(Company No. 15678-H) (A Participating Organisation of Bursa Malaysia Securities Berhad)
TO ACQUIRE ALL THE REMAINING ORDINARY SHARES IN IDEAL JACOBS (MALAYSIA) CORPORATION BHD (“IDEAL JACOBS”) AS WELL AS ANY NEW ORDINARY SHARES ARISING FROM THE EXERCISE OF OPTIONS GRANTED PURSUANT TO IDEAL JACOBS’ EMPLOYEE SHARE OPTION SCHEME NOT ALREADY HELD BY THE OFFEROR (“OFFER SHARES”) FOR A CASH CONSIDERATION OF RM0.23 PER OFFER SHARE (“OFFER”)
Independent Adviser
M&A SECURITIES SDN BHD (15017-H) (A Wholly-Owned Subsidiary of Insas Berhad)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
This Independent Advice Circular is dated 15 March 2018
THIS INDEPENDENT ADVICE CIRCULAR (“IAC”) IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. YOU SHOULD READ THIS IAC IN CONJUNCTION WITH THE OFFER DOCUMENT DATED 5 MARCH 2018 ISSUED BY KENANGA INVESTMENT BANK BERHAD ON BEHALF OF WIDAD BUSINESS GROUP SDN BHD (“OFFEROR”) WHICH HAS BEEN SENT TO YOU. If you are in any doubt as to the action to be taken in relation to the Offer (as defined herein), please consult your stockbroker, solicitor, bank manager, accountant or other professional advisers immediately. If you have sold or transferred all your Offer Shares (as defined herein), you should at once hand this IAC to the purchaser or stockbroker or agent through whom you effected the sale or transfer for onward transmission to the purchaser or transferee of such Offer Shares. Pursuant to Rule 11 of the Rules on Take-overs, Mergers and Compulsory Acquisitions, the Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of this IAC. However, such notification shall not be taken to suggest that the SC agrees with our recommendation or assumes responsibility for the correctness of any statements made or opinions or reports expressed in IAC.
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
INDEPENDENT ADVICE CIRCULAR TO THE HOLDERS OF THE OFFER SHARES IN RELATION TO THE UNCONDITIONAL MANDATORY TAKE-OVER OFFER
BY
WIDAD BUSINESS GROUP SDN BHD
(Company No. 602380-P) (Incorporated in Malaysia under the Companies Act, 1965)
THROUGH
KENANGA INVESTMENT BANK BERHAD
(Company No. 15678-H) (A Participating Organisation of Bursa Malaysia Securities Berhad)
TO ACQUIRE ALL THE REMAINING ORDINARY SHARES IN IDEAL JACOBS (MALAYSIA) CORPORATION BHD (“IDEAL JACOBS”) AS WELL AS ANY NEW ORDINARY SHARES ARISING FROM THE EXERCISE OF OPTIONS GRANTED PURSUANT TO IDEAL JACOBS’ EMPLOYEE SHARE OPTION SCHEME NOT ALREADY HELD BY THE OFFEROR (“OFFER SHARES”) FOR A CASH CONSIDERATION OF RM0.23 PER OFFER SHARE (“OFFER”)
Independent Adviser
M&A SECURITIES SDN BHD (15017-H) (A Wholly-Owned Subsidiary of Insas Berhad)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
This Independent Advice Circular is dated 15 March 2018
THIS INDEPENDENT ADVICE CIRCULAR (“IAC”) IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. YOU SHOULD READ THIS IAC IN CONJUNCTION WITH THE OFFER DOCUMENT DATED 5 MARCH 2018 ISSUED BY KENANGA INVESTMENT BANK BERHAD ON BEHALF OF WIDAD BUSINESS GROUP SDN BHD (“OFFEROR”) WHICH HAS BEEN SENT TO YOU. If you are in any doubt as to the action to be taken in relation to the Offer (as defined herein), please consult your stockbroker, solicitor, bank manager, accountant or other professional advisers immediately. If you have sold or transferred all your Offer Shares (as defined herein), you should at once hand this IAC to the purchaser or stockbroker or agent through whom you effected the sale or transfer for onward transmission to the purchaser or transferee of such Offer Shares. Pursuant to Rule 11 of the Rules on Take-overs, Mergers and Compulsory Acquisitions, the Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of this IAC. However, such notification shall not be taken to suggest that the SC agrees with our recommendation or assumes responsibility for the correctness of any statements made or opinions or reports expressed in IAC.
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
INDEPENDENT ADVICE CIRCULAR TO THE HOLDERS OF THE OFFER SHARES IN RELATION TO THE UNCONDITIONAL MANDATORY TAKE-OVER OFFER
BY
WIDAD BUSINESS GROUP SDN BHD
(Company No. 602380-P) (Incorporated in Malaysia under the Companies Act, 1965)
THROUGH
KENANGA INVESTMENT BANK BERHAD
(Company No. 15678-H) (A Participating Organisation of Bursa Malaysia Securities Berhad)
TO ACQUIRE ALL THE REMAINING ORDINARY SHARES IN IDEAL JACOBS (MALAYSIA) CORPORATION BHD (“IDEAL JACOBS”) AS WELL AS ANY NEW ORDINARY SHARES ARISING FROM THE EXERCISE OF OPTIONS GRANTED PURSUANT TO IDEAL JACOBS’ EMPLOYEE SHARE OPTION SCHEME NOT ALREADY HELD BY THE OFFEROR (“OFFER SHARES”) FOR A CASH CONSIDERATION OF RM0.23 PER OFFER SHARE (“OFFER”)
Independent Adviser
M&A SECURITIES SDN BHD (15017-H) (A Wholly-Owned Subsidiary of Insas Berhad)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
This Independent Advice Circular is dated 15 March 2018
THIS INDEPENDENT ADVICE CIRCULAR (“IAC”) IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. YOU SHOULD READ THIS IAC IN CONJUNCTION WITH THE OFFER DOCUMENT DATED 5 MARCH 2018 ISSUED BY KENANGA INVESTMENT BANK BERHAD ON BEHALF OF WIDAD BUSINESS GROUP SDN BHD (“OFFEROR”) WHICH HAS BEEN SENT TO YOU. If you are in any doubt as to the action to be taken in relation to the Offer (as defined herein), please consult your stockbroker, solicitor, bank manager, accountant or other professional advisers immediately. If you have sold or transferred all your Offer Shares (as defined herein), you should at once hand this IAC to the purchaser or stockbroker or agent through whom you effected the sale or transfer for onward transmission to the purchaser or transferee of such Offer Shares. Pursuant to Rule 11 of the Rules on Take-overs, Mergers and Compulsory Acquisitions, the Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of this IAC. However, such notification shall not be taken to suggest that the SC agrees with our recommendation or assumes responsibility for the correctness of any statements made or opinions or reports expressed in IAC.
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
INDEPENDENT ADVICE CIRCULAR TO THE HOLDERS OF THE OFFER SHARES IN RELATION TO THE UNCONDITIONAL MANDATORY TAKE-OVER OFFER
BY
WIDAD BUSINESS GROUP SDN BHD
(Company No. 602380-P) (Incorporated in Malaysia under the Companies Act, 1965)
THROUGH
KENANGA INVESTMENT BANK BERHAD
(Company No. 15678-H) (A Participating Organisation of Bursa Malaysia Securities Berhad)
TO ACQUIRE ALL THE REMAINING ORDINARY SHARES IN IDEAL JACOBS (MALAYSIA) CORPORATION BHD (“IDEAL JACOBS”) AS WELL AS ANY NEW ORDINARY SHARES ARISING FROM THE EXERCISE OF OPTIONS GRANTED PURSUANT TO IDEAL JACOBS’ EMPLOYEE SHARE OPTION SCHEME NOT ALREADY HELD BY THE OFFEROR (“OFFER SHARES”) FOR A CASH CONSIDERATION OF RM0.23 PER OFFER SHARE (“OFFER”)
Independent Adviser
M&A SECURITIES SDN BHD (15017-H) (A Wholly-Owned Subsidiary of Insas Berhad)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
This Independent Advice Circular is dated 15 March 2018
THIS INDEPENDENT ADVICE CIRCULAR (“IAC”) IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. YOU SHOULD READ THIS IAC IN CONJUNCTION WITH THE OFFER DOCUMENT DATED 5 MARCH 2018 ISSUED BY KENANGA INVESTMENT BANK BERHAD ON BEHALF OF WIDAD BUSINESS GROUP SDN BHD (“OFFEROR”) WHICH HAS BEEN SENT TO YOU. If you are in any doubt as to the action to be taken in relation to the Offer (as defined herein), please consult your stockbroker, solicitor, bank manager, accountant or other professional advisers immediately. If you have sold or transferred all your Offer Shares (as defined herein), you should at once hand this IAC to the purchaser or stockbroker or agent through whom you effected the sale or transfer for onward transmission to the purchaser or transferee of such Offer Shares. Pursuant to Rule 11 of the Rules on Take-overs, Mergers and Compulsory Acquisitions, the Securities Commission Malaysia (“SC”) has notified that it has no further comments to the contents of this IAC. However, such notification shall not be taken to suggest that the SC agrees with our recommendation or assumes responsibility for the correctness of any statements made or opinions or reports expressed in IAC.
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
INDEPENDENT ADVICE CIRCULAR TO THE HOLDERS OF THE OFFER SHARES IN RELATION TO THE UNCONDITIONAL MANDATORY TAKE-OVER OFFER
BY
WIDAD BUSINESS GROUP SDN BHD
(Company No. 602380-P) (Incorporated in Malaysia under the Companies Act, 1965)
THROUGH
KENANGA INVESTMENT BANK BERHAD
(Company No. 15678-H) (A Participating Organisation of Bursa Malaysia Securities Berhad)
TO ACQUIRE ALL THE REMAINING ORDINARY SHARES IN IDEAL JACOBS (MALAYSIA) CORPORATION BHD (“IDEAL JACOBS”) AS WELL AS ANY NEW ORDINARY SHARES ARISING FROM THE EXERCISE OF OPTIONS GRANTED PURSUANT TO IDEAL JACOBS’ EMPLOYEE SHARE OPTION SCHEME NOT ALREADY HELD BY THE OFFEROR (“OFFER SHARES”) FOR A CASH CONSIDERATION OF RM0.23 PER OFFER SHARE (“OFFER”)
Independent Adviser
M&A SECURITIES SDN BHD (15017-H) (A Wholly-Owned Subsidiary of Insas Berhad)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
This Independent Advice Circular is dated 15 March 2018
DEFINITIONS
ii
Unless the context requires otherwise, the following definitions shall apply throughout this IAC: Act : Companies Act, 2016
Accepting Holder(s) : Holder(s) who accepts the Offer
Acquisition
: Acquisition by Ideal Jacobs of the entire equity interest in Widad Builders for a total purchase consideration of RM520.0 million to be satisfied through a combination of cash and issuance of Consideration Shares
Acquisition LTD : 17 August 2017, being the last full trading day prior to the date of Acquisition SPA
Acquisition SPA
: Conditional sale and purchase agreement dated 18 August 2017 entered into between Ideal Jacobs and WBGSB for the Acquisition
Amendment : Amendment to Ideal Jacobs’ Memorandum of Association
AMLR : ACE Market Listing Requirements issued by Bursa Securities and includes any amendments from time to time
Bursa Depository : Bursa Malaysia Depository Sdn Bhd (165570-W)
Bursa Securities : Bursa Malaysia Securities Berhad (635998-W)
CAGR : Compounded annual growth rate
Closing Date : First Closing Date, or in the event the Offer is revised or extended in accordance with the Rules and the terms and conditions of the Offer Document, such other revised or extended closing date as the Offeror may decide and as may be announced by Kenanga IB on behalf of the Offeror, no later than 2 days before the Closing Date
CMSA : Capital Markets and Services Act, 2007
Consideration Issue Price : Issue price of RM0.23 per Consideration Share
Consideration Shares : 1,782,608,695 new IJ Shares to be issued at the Consideration Issue Price pursuant to the Acquisition
Dato’ Rizal : Dato’ Mohd Rizal Bin Mohd Jaafar
DCF : Discounted cash flow
Disposal
: Disposal by Ideal Jacobs of Ideal Jacobs (HK) Corporation Ltd, Ideal Jacobs (Xiamen) Corporation, Xiamen Ideal Jacobs International Ltd Company and Suzhou Ideal Jacobs Corporation for a cash consideration of RM28.0 million
Disposal SPA
: Conditional sale and purchase agreement dated 18 August 2017 entered into between Ideal Jacobs and Oriental Dragon Incorporation Limited for the Disposal
Dissenting Shareholder : A holder of the Offer Shares who has not accepted the Offer and/or failed or refused to transfer the Offer Shares to the Offeror in accordance with the terms and conditions of the Offer Document
i
DEFINITIONS (Cont’d)
iii
Disposal Subsidiaries : Ideal Jacobs (HK) Corporation Ltd, Ideal Jacobs (Xiamen) Corporation, Xiamen Ideal Jacobs International Ltd Company and Suzhou Ideal Jacobs Corporation
Distribution : Any declaration or payment of dividend and/or any other distribution by the Offeree
ESOS Options : Options granted pursuant to Ideal Jacobs’ employee share option scheme. As at the LPD, 1,150,075 ESOS Options are outstanding in Ideal Jacobs
FBM KLCI : FTSE Bursa Malaysia KLCI Index
FCFE : Free cash flows to equity
First Closing Date : 5.00 p.m. on 26 March 2018, being 21 days from the Posting Date
Form of Acceptance and Transfer
: Form of acceptance and transfer for the Offer enclosed with the Offer Document
FPE
: Financial period ended/ending, as the case may be
Free Warrants Issue : Issuance of free Warrants on the basis of 1 Warrant for every 5 existing IJ Shares held upon completion of the Acquisition, Disposal and Placement at an entitlement date and exercise price to be determined later
FYE : Financial year ended/ending, as the case may be
HOA : Non-binding heads of agreement dated 5 June 2017 entered into between Ideal Jacobs and WBGSB for the Acquisition with an exclusivity period of 45 days, which was extended for an additional 30 days as supplemented by the letter dated 20 July 2017
Holders : Holders of the Offer Shares
IAC : The independent advice circular dated 15 March 2018 in relation to the Offer
IAL : The independent advice letter dated 15 March 2018 issued by M&A Securities as attached in Part B of this IAC
IFM
: Integrated facilities management
Independent Adviser or M&A Securities
: M&A Securities Sdn Bhd, the Independent Adviser appointed by the Board to advise the IJ Board and Holders on the Offer
Ideal Jacobs or Offeree : Ideal Jacobs (Malaysia) Corporation Bhd (857363-U)
IJ Board or Board
: Board of Directors of Ideal Jacobs
IJ Group or Group
: Ideal Jacobs and its subsidiaries, collectively
IJ Share(s) or Share(s)
: Ordinary shares in Ideal Jacobs
Joint Ultimate Offerors : Collectively, Tan Sri Ikmal and Puan Sri Jamilah
Kenanga IB : Kenanga Investment Bank Berhad (15678-H) ii
DEFINITIONS (Cont’d)
iv
LPD : 8 March 2018, being the latest practicable date which is not more than 7 days before the date of this IAC
Market Day : A day on which Bursa Securities is open for trading in securities
New IJ Group : Ideal Jacobs and its subsidiaries, collectively after the completion of the Acquisition, Placement and Disposal
Notice : Notice of the Offer dated 12 February 2018, served on the Board by Kenanga IB on behalf of the Offeror
Notice LTD : 9 February 2018, being the last full trading day prior to the serving of the Notice
Offer : Unconditional mandatory take-over offer by the Offeror through Kenanga IB to acquire the Offer Shares at the Offer Price in accordance with the terms and conditions of the Offer Document
Offeror or WBGSB : Widad Business Group Sdn Bhd (602380-P)
Offer Document : The document dated 5 March 2018 together with the Form of Acceptance and Transfer issued by Kenanga IB on behalf of the Offeror, which sets out the details of the Offer as well as procedures for acceptance of the Offer and method of settlement of the Offer
Offer Document LPD : 1 March 2018, being the latest practicable date which is not more than 7 days before the date of the Offer Document
Offer Period : Period commencing from 18 August 2017, being the date of Acquisition SPA, until the earlier of either (i) the Closing Date; or (ii) the date the Offer lapses or is withdrawn with the consent of the SC
Offer Price : Cash offer price of RM0.23 per Offer Share
Offer Share(s) : All the remaining IJ Shares that are not already held by the Offeror and Joint Ultimate Offerors as well as any new IJ Shares that may be issued prior to the Closing Date pursuant to the exercise of the ESOS Options. As at the LPD, the Offer Shares comprise 136,124,275 IJ Shares (excluding 1,150,075 new IJ Shares that may be issued from the potential exercise of the ESOS Options), representing 99.47% of Ideal Jacobs’ total number of issued shares as at the LPD
Official List : A list specifying all securities which have been admitted for listing on Bursa Securities and not removed
Placement : Private placement of up to 534,032,115 new IJ Shares representing 25% of the enlarged total issued share capital of Ideal Jacobs upon completion of the Acquisition at an issue price to be determined later
Posting Date : 5 March 2018, being the date of posting of the Offer Document
Proposals
: Collectively, the Acquisition, Disposal, Placement, Free Warrants Issue and Amendment
Puan Sri Jamilah : Puan Sri Jamilah Binti Mahamad Isa
iii
DEFINITIONS (Cont’d)
v
Public Spread Requirement
: The requirements pursuant to paragraph 8.02(1) of the AMLR, whereby a listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are held by public shareholders to ensure its continued listing on the ACE Market of Bursa Securities
Rules : Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the SC
SC : Securities Commission Malaysia
SOPV : Sum-of-parts valuation
Substantial Shareholders’ Undertakings
: Irrevocable undertakings by Ideal Jacobs’ existing substantial shareholders, namely Andrew Conrad Jacobs and Dato’ Meng Bin not to participate in or accept the Offer in respect of the IJ Shares held directly and indirectly by them, which collectively amount to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD, made through their respective undertaking letters dated 15 December 2017
Tan Sri Ikmal : Tan Sri Muhammad Ikmal Opat Bin Abdullah
VWAMP : Volume weighted average market price
Warrants
: Up to 490,928,392 free warrants to be issued pursuant to the Free Warrants Issue
WBGSB group of companies
: WBGSB and its subsidiaries and associated companies, collectively
Widad Builders : Widad Builders Sdn Bhd (536572-D)
Widad Builders Group : Widad Builders and its subsidiaries, collectively
CURRENCIES
CNY : Chinese Yuan Renminbi
RM and sen : Ringgit Malaysia and sen respectively
Words importing the singular shall, where applicable, include the plural and vice versa. Words denoting the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Unless otherwise indicated, all references to dates and times in this IAC refer to Malaysian dates and times. Where a period specified in the Rules, as appearing in this IAC, ends on a day which is not a Market Day, the period is extended until the next Market Day. All references to “you” or “Holder” in this IAC are to the holder of the Offer Shares, being the person to whom the Offer is being made. All references to “we”, “us” or “our” in this IAC, save for the Letter from the IJ Board, are to M&A Securities, the Independent Adviser for the Offer. Any reference in this IAC to any enactment is a reference to that enactment for the time being amended or re-enacted. Any discrepancies in the tables included in this IAC between the amounts listed, actual figures and the totals thereof are due to rounding.
DEFINITIONS (Cont’d)
v
Public Spread Requirement
: The requirements pursuant to paragraph 8.02(1) of the AMLR, whereby a listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are held by public shareholders to ensure its continued listing on the ACE Market of Bursa Securities
Rules : Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the SC
SC : Securities Commission Malaysia
SOPV : Sum-of-parts valuation
Substantial Shareholders’ Undertakings
: Irrevocable undertakings by Ideal Jacobs’ existing substantial shareholders, namely Andrew Conrad Jacobs and Dato’ Meng Bin not to participate in or accept the Offer in respect of the IJ Shares held directly and indirectly by them, which collectively amount to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD, made through their respective undertaking letters dated 15 December 2017
Tan Sri Ikmal : Tan Sri Muhammad Ikmal Opat Bin Abdullah
VWAMP : Volume weighted average market price
Warrants
: Up to 490,928,392 free warrants to be issued pursuant to the Free Warrants Issue
WBGSB group of companies
: WBGSB and its subsidiaries and associated companies, collectively
Widad Builders : Widad Builders Sdn Bhd (536572-D)
Widad Builders Group : Widad Builders and its subsidiaries, collectively
CURRENCIES
CNY : Chinese Yuan Renminbi
RM and sen : Ringgit Malaysia and sen respectively
Words importing the singular shall, where applicable, include the plural and vice versa. Words denoting the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Unless otherwise indicated, all references to dates and times in this IAC refer to Malaysian dates and times. Where a period specified in the Rules, as appearing in this IAC, ends on a day which is not a Market Day, the period is extended until the next Market Day. All references to “you” or “Holder” in this IAC are to the holder of the Offer Shares, being the person to whom the Offer is being made. All references to “we”, “us” or “our” in this IAC, save for the Letter from the IJ Board, are to M&A Securities, the Independent Adviser for the Offer. Any reference in this IAC to any enactment is a reference to that enactment for the time being amended or re-enacted. Any discrepancies in the tables included in this IAC between the amounts listed, actual figures and the totals thereof are due to rounding.
DEFINITIONS (Cont’d)
v
Public Spread Requirement
: The requirements pursuant to paragraph 8.02(1) of the AMLR, whereby a listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are held by public shareholders to ensure its continued listing on the ACE Market of Bursa Securities
Rules : Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the SC
SC : Securities Commission Malaysia
SOPV : Sum-of-parts valuation
Substantial Shareholders’ Undertakings
: Irrevocable undertakings by Ideal Jacobs’ existing substantial shareholders, namely Andrew Conrad Jacobs and Dato’ Meng Bin not to participate in or accept the Offer in respect of the IJ Shares held directly and indirectly by them, which collectively amount to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD, made through their respective undertaking letters dated 15 December 2017
Tan Sri Ikmal : Tan Sri Muhammad Ikmal Opat Bin Abdullah
VWAMP : Volume weighted average market price
Warrants
: Up to 490,928,392 free warrants to be issued pursuant to the Free Warrants Issue
WBGSB group of companies
: WBGSB and its subsidiaries and associated companies, collectively
Widad Builders : Widad Builders Sdn Bhd (536572-D)
Widad Builders Group : Widad Builders and its subsidiaries, collectively
CURRENCIES
CNY : Chinese Yuan Renminbi
RM and sen : Ringgit Malaysia and sen respectively
Words importing the singular shall, where applicable, include the plural and vice versa. Words denoting the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Unless otherwise indicated, all references to dates and times in this IAC refer to Malaysian dates and times. Where a period specified in the Rules, as appearing in this IAC, ends on a day which is not a Market Day, the period is extended until the next Market Day. All references to “you” or “Holder” in this IAC are to the holder of the Offer Shares, being the person to whom the Offer is being made. All references to “we”, “us” or “our” in this IAC, save for the Letter from the IJ Board, are to M&A Securities, the Independent Adviser for the Offer. Any reference in this IAC to any enactment is a reference to that enactment for the time being amended or re-enacted. Any discrepancies in the tables included in this IAC between the amounts listed, actual figures and the totals thereof are due to rounding.
DEFINITIONS (Cont’d)
v
Public Spread Requirement
: The requirements pursuant to paragraph 8.02(1) of the AMLR, whereby a listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are held by public shareholders to ensure its continued listing on the ACE Market of Bursa Securities
Rules : Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the SC
SC : Securities Commission Malaysia
SOPV : Sum-of-parts valuation
Substantial Shareholders’ Undertakings
: Irrevocable undertakings by Ideal Jacobs’ existing substantial shareholders, namely Andrew Conrad Jacobs and Dato’ Meng Bin not to participate in or accept the Offer in respect of the IJ Shares held directly and indirectly by them, which collectively amount to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD, made through their respective undertaking letters dated 15 December 2017
Tan Sri Ikmal : Tan Sri Muhammad Ikmal Opat Bin Abdullah
VWAMP : Volume weighted average market price
Warrants
: Up to 490,928,392 free warrants to be issued pursuant to the Free Warrants Issue
WBGSB group of companies
: WBGSB and its subsidiaries and associated companies, collectively
Widad Builders : Widad Builders Sdn Bhd (536572-D)
Widad Builders Group : Widad Builders and its subsidiaries, collectively
CURRENCIES
CNY : Chinese Yuan Renminbi
RM and sen : Ringgit Malaysia and sen respectively
Words importing the singular shall, where applicable, include the plural and vice versa. Words denoting the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Unless otherwise indicated, all references to dates and times in this IAC refer to Malaysian dates and times. Where a period specified in the Rules, as appearing in this IAC, ends on a day which is not a Market Day, the period is extended until the next Market Day. All references to “you” or “Holder” in this IAC are to the holder of the Offer Shares, being the person to whom the Offer is being made. All references to “we”, “us” or “our” in this IAC, save for the Letter from the IJ Board, are to M&A Securities, the Independent Adviser for the Offer. Any reference in this IAC to any enactment is a reference to that enactment for the time being amended or re-enacted. Any discrepancies in the tables included in this IAC between the amounts listed, actual figures and the totals thereof are due to rounding.
DEFINITIONS (Cont’d)
v
Public Spread Requirement
: The requirements pursuant to paragraph 8.02(1) of the AMLR, whereby a listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are held by public shareholders to ensure its continued listing on the ACE Market of Bursa Securities
Rules : Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the SC
SC : Securities Commission Malaysia
SOPV : Sum-of-parts valuation
Substantial Shareholders’ Undertakings
: Irrevocable undertakings by Ideal Jacobs’ existing substantial shareholders, namely Andrew Conrad Jacobs and Dato’ Meng Bin not to participate in or accept the Offer in respect of the IJ Shares held directly and indirectly by them, which collectively amount to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD, made through their respective undertaking letters dated 15 December 2017
Tan Sri Ikmal : Tan Sri Muhammad Ikmal Opat Bin Abdullah
VWAMP : Volume weighted average market price
Warrants
: Up to 490,928,392 free warrants to be issued pursuant to the Free Warrants Issue
WBGSB group of companies
: WBGSB and its subsidiaries and associated companies, collectively
Widad Builders : Widad Builders Sdn Bhd (536572-D)
Widad Builders Group : Widad Builders and its subsidiaries, collectively
CURRENCIES
CNY : Chinese Yuan Renminbi
RM and sen : Ringgit Malaysia and sen respectively
Words importing the singular shall, where applicable, include the plural and vice versa. Words denoting the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Unless otherwise indicated, all references to dates and times in this IAC refer to Malaysian dates and times. Where a period specified in the Rules, as appearing in this IAC, ends on a day which is not a Market Day, the period is extended until the next Market Day. All references to “you” or “Holder” in this IAC are to the holder of the Offer Shares, being the person to whom the Offer is being made. All references to “we”, “us” or “our” in this IAC, save for the Letter from the IJ Board, are to M&A Securities, the Independent Adviser for the Offer. Any reference in this IAC to any enactment is a reference to that enactment for the time being amended or re-enacted. Any discrepancies in the tables included in this IAC between the amounts listed, actual figures and the totals thereof are due to rounding.
DEFINITIONS (Cont’d)
v
Public Spread Requirement
: The requirements pursuant to paragraph 8.02(1) of the AMLR, whereby a listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are held by public shareholders to ensure its continued listing on the ACE Market of Bursa Securities
Rules : Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the SC
SC : Securities Commission Malaysia
SOPV : Sum-of-parts valuation
Substantial Shareholders’ Undertakings
: Irrevocable undertakings by Ideal Jacobs’ existing substantial shareholders, namely Andrew Conrad Jacobs and Dato’ Meng Bin not to participate in or accept the Offer in respect of the IJ Shares held directly and indirectly by them, which collectively amount to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD, made through their respective undertaking letters dated 15 December 2017
Tan Sri Ikmal : Tan Sri Muhammad Ikmal Opat Bin Abdullah
VWAMP : Volume weighted average market price
Warrants
: Up to 490,928,392 free warrants to be issued pursuant to the Free Warrants Issue
WBGSB group of companies
: WBGSB and its subsidiaries and associated companies, collectively
Widad Builders : Widad Builders Sdn Bhd (536572-D)
Widad Builders Group : Widad Builders and its subsidiaries, collectively
CURRENCIES
CNY : Chinese Yuan Renminbi
RM and sen : Ringgit Malaysia and sen respectively
Words importing the singular shall, where applicable, include the plural and vice versa. Words denoting the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Unless otherwise indicated, all references to dates and times in this IAC refer to Malaysian dates and times. Where a period specified in the Rules, as appearing in this IAC, ends on a day which is not a Market Day, the period is extended until the next Market Day. All references to “you” or “Holder” in this IAC are to the holder of the Offer Shares, being the person to whom the Offer is being made. All references to “we”, “us” or “our” in this IAC, save for the Letter from the IJ Board, are to M&A Securities, the Independent Adviser for the Offer. Any reference in this IAC to any enactment is a reference to that enactment for the time being amended or re-enacted. Any discrepancies in the tables included in this IAC between the amounts listed, actual figures and the totals thereof are due to rounding.
DEFINITIONS (Cont’d)
v
Public Spread Requirement
: The requirements pursuant to paragraph 8.02(1) of the AMLR, whereby a listed issuer must ensure that at least 25% of its total listed shares (excluding treasury shares) are held by public shareholders to ensure its continued listing on the ACE Market of Bursa Securities
Rules : Rules on Take-overs, Mergers and Compulsory Acquisitions issued by the SC
SC : Securities Commission Malaysia
SOPV : Sum-of-parts valuation
Substantial Shareholders’ Undertakings
: Irrevocable undertakings by Ideal Jacobs’ existing substantial shareholders, namely Andrew Conrad Jacobs and Dato’ Meng Bin not to participate in or accept the Offer in respect of the IJ Shares held directly and indirectly by them, which collectively amount to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD, made through their respective undertaking letters dated 15 December 2017
Tan Sri Ikmal : Tan Sri Muhammad Ikmal Opat Bin Abdullah
VWAMP : Volume weighted average market price
Warrants
: Up to 490,928,392 free warrants to be issued pursuant to the Free Warrants Issue
WBGSB group of companies
: WBGSB and its subsidiaries and associated companies, collectively
Widad Builders : Widad Builders Sdn Bhd (536572-D)
Widad Builders Group : Widad Builders and its subsidiaries, collectively
CURRENCIES
CNY : Chinese Yuan Renminbi
RM and sen : Ringgit Malaysia and sen respectively
Words importing the singular shall, where applicable, include the plural and vice versa. Words denoting the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations. Unless otherwise indicated, all references to dates and times in this IAC refer to Malaysian dates and times. Where a period specified in the Rules, as appearing in this IAC, ends on a day which is not a Market Day, the period is extended until the next Market Day. All references to “you” or “Holder” in this IAC are to the holder of the Offer Shares, being the person to whom the Offer is being made. All references to “we”, “us” or “our” in this IAC, save for the Letter from the IJ Board, are to M&A Securities, the Independent Adviser for the Offer. Any reference in this IAC to any enactment is a reference to that enactment for the time being amended or re-enacted. Any discrepancies in the tables included in this IAC between the amounts listed, actual figures and the totals thereof are due to rounding.
iv
TABLE OF CONTENTS
vi
PAGE EXECUTIVE SUMMARY 1 PART A: LETTER FROM THE BOARD 1. INTRODUCTION 7 2. SALIENT TERMS AND CONDITIONS OF THE OFFER 9 3. DETAILS OF ACCEPTANCES 9 4. DIRECTORS’ VIEWS 9 5. INDEPENDENT ADVICE LETTER 11 6. DISCLOSURE OF DIRECTORS’ INTEREST 11 7. DIRECTORS’ RESPONSIBILITY STATEMENT 11 8. DIRECTORS’ RECOMMENDATION 12 PART B: INDEPENDENT ADVICE LETTER FROM M&A SECURITIES 1. INTRODUCTION 14 2. SALIENT TERMS AND CONDITIONS OF THE OFFER 15 3. DETAILS OF ACCEPTANCES 15 4. SCOPE AND LIMITATIONS TO THE EVALUATION OF THE OFFER 16 5. EVALUATION OF THE OFFER 17 6. FAIRNESS EVALUATION OF THE OFFER 18 7. REASONABLENESS EVALUATION OF THE OFFER 28 8. RATIONALE FOR THE OFFER AND FUTURE PLANS FOR IDEAL JACOBS AND
ITS EMPLOYEES 30
9. FURTHER INFORMATION 32 10. CONCLUSION AND RECOMMENDATION 32 APPENDICES I INFORMATION ON IDEAL JACOBS 35 II FURTHER INFORMATION 44
v
EXECUTIVE SUMMARY
1
THIS EXECUTIVE SUMMARY HIGHLIGHTS ONLY THE PERTINENT INFORMATION OF THE OFFER. WE ADVISE HOLDERS TO READ CAREFULLY THE CONTENTS OF THIS IAC FOR FURTHER INFORMATION AND RECOMMENDATIONS FROM THE DIRECTORS AND M&A SECURITIES (THE INDEPENDENT ADVISER). THIS IAC SHOULD ALSO BE READ TOGETHER WITH THE OFFER DOCUMENT ISSUED BY THE OFFEROR. 1. INTRODUCTION
On 5 June 2017, Ideal Jacobs entered into the HOA with WBGSB for the Acquisition. On 18 August 2017, Ideal Jacobs and WBGSB entered into the Acquisition SPA. Under the Acquisition SPA, the purchase consideration of RM520 million for the Acquisition is to be satisfied through cash (RM110 million) and the issuance of the Consideration Shares at the Consideration Issue Price (RM410 million). In conjunction with the Acquisition, Ideal Jacobs is also undertaking the other Proposals, which comprise: (a) disposal of Ideal Jacobs (HK) Corporation Ltd, Ideal Jacobs (Xiamen) Corporation,
Xiamen Ideal Jacobs International Ltd Company and Suzhou Ideal Jacobs Corporation for a cash consideration of RM28.0 million, that is, the Disposal;
(b) private placement of up to 534,032,115 new IJ Shares representing 25% of the enlarged total issued share capital of Ideal Jacobs upon completion of the Acquisition at an issue price to be determined later, that is, the Placement;
(c) issuance of free warrants on the basis of 1 warrant for every 5 existing IJ Shares held upon completion of the Acquisition, Disposal and Placement at an entitlement date to be determined later, that is, the Free Warrants Issue; and
(d) amendment to its Memorandum of Association, that is, the Amendment.
Ideal Jacobs’ shareholders had approved the Proposals at its extraordinary general meeting held on 29 January 2018. Please refer to Ideal Jacobs’ circular to shareholders dated 4 January 2018 for further information on the Proposals.
Upon the issuance of the Consideration Shares and before the Placement, WBGSB's shareholding in Ideal Jacobs will increase from nil to 92.87% and the collective shareholdings of the Offeror and Joint Ultimate Offerors will increase from 0.53% to 92.91%.
Therefore, the Offeror is obligated to extend the Offer to acquire the Offer Shares that are not already held by the Offeror and Joint Ultimate Offerors pursuant to Section 218(2) of the CMSA and Paragraph 4.01(a) of the Rules at a cash consideration of RM0.23 per Offer Share, which is equal to the Consideration Issue Price. On 12 February 2018, the Acquisition SPA became unconditional. On even date, Kenanga IB, on the Offeror’s behalf, served the Notice on the IJ Board informing them of the Offeror’s obligation to undertake the Offer. On the same day, the Offeree announced the receipt of the Notice, a copy of which was sent to you on 14 February 2018. On 14 February 2018, in accordance with Paragraph 3.06 of the Rules, the Offeree announced the appointment of M&A Securities as the Independent Adviser to advise the IJ Board and the Holders on the fairness and reasonableness of the Offer.
1
EXECUTIVE SUMMARY (Cont’d)
2
The Joint Ultimate Offerors for the Offer are Tan Sri Ikmal and Puan Sri Jamilah. There are no persons acting in concert (as defined in Section 216 of the CMSA) with the Offeror pursuant to the Offer. As at the LPD, the Offeror and Joint Ultimate Offerors: (a) have not received any irrevocable undertaking from any Holder to accept the Offer;
and
(b) have not received any other irrevocable undertaking from any Holder to reject the Offer except for the Substantial Shareholders’ Undertakings.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are set out below: 2.1 Consideration for the Offer
The Offeror will pay a cash consideration of RM0.23 per Offer Share to Accepting Holders. If you are entitled to retain any Distribution that Ideal Jacobs may declare, make or pay on or after the date of the Notice but before the Closing Date, the Offeror will reduce the Offer Price by an amount equivalent to the net Distribution per Offer Share that you are entitled to retain. As at the LPD, Ideal Jacobs has not declared any Distribution. You may accept the Offer for all or part of your Offer Shares. The Offeror will round down the cash consideration payable to an Accepting Holder to the nearest whole sen. The Offeror will not pay fractions of a sen, if any, to Accepting Holders.
2.2 Condition of the Offer The Offer is not conditional upon any minimum acceptance level as the Offeror and Joint Ultimate Offerors will collectively hold more than 50% of Ideal Jacobs’ voting shares upon the issuance of the Consideration Shares.
2.3 Duration of the Offer
The Offer will remain open for acceptances until 5:00 p.m. on 26 March 2018, that is, the First Closing Date unless extended or revised by the Offeror in accordance with the Rules.
Please refer to Section 2 of Appendix I of the Offer Document for further details on the duration of the Offer.
2.4 Method of settlement
The Offeror will settle the consideration for the Offer Shares in the form of cheque, banker’s draft or cashier’s order which will be despatched to Accepting Holders or their designated agents by ordinary mail within 10 days from the date of receipt of the valid acceptances. Please refer to Appendix I of the Offer Document for the full terms and conditions of the Offer and Appendix II of the Offer Document for the procedures for acceptance and method of settlement of the Offer.
2
EXECUTIVE SUMMARY (Cont’d)
3
3. DETAILS OF ACCEPTANCES
As disclosed in the Offer Document, as at the Offer Document LPD, the Offeror has received irrevocable undertakings from the existing substantial shareholders of Ideal Jacobs, namely Andrew Conrad Jacobs and Dato’ Meng Bin, that they will not accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD. Save as disclosed above, the Offeror has not received any irrevocable undertakings from any Holder to accept or reject the Offer and/or acceptances of the Offer from any Holder. As at the LPD, there is no announcement made by Kenanga IB, on behalf of the Offeror of any acceptance of the Offer Shares.
4. EVALUATION OF THE OFFER
In arriving at its conclusion and recommendation, M&A Securities has assessed the fairness and reasonableness of the Offer in accordance with Paragraphs 1 to 6 under Schedule 2: Part III of the Rules, where the term “fair and reasonable” should generally be analysed as 2 distinct criteria, i.e. whether the offer is “fair” and whether the offer is “reasonable”, rather than as composite term.
4.1 Fairness evaluation of the Offer
(a) Valuation of the entire equity interest in Ideal Jacobs
Upon the completion of the Acquisition and Disposal, Ideal Jacobs will assume the entire business of the Widad Builders Group and will no longer continue with its existing manufacturing, fabrication and trading businesses. Therefore, in arriving at the fair value of IJ Shares, M&A Securities has adopted the SOPV model as the sole valuation method, which comprises a DCF valuation of the FCFE to be generated from the core business activities of the Widad Builders Group, and adding the value of assets which are not utilised in the core business activities of the Widad Builders Group. M&A Securities views that the SOPV model to be the most appropriate method to estimate the value of the Shares for the reasons as set out in Section 6 in Part B of this IAC. Based on the SOPV method, M&A Securities has derived an estimated fair value for the entire equity interest in Ideal Jacobs of approximately RM703.6 million to RM751.2 million or a fair value per IJ Share of between RM0.2868 to RM0.3060. Further information on the assessment on the valuation of the IJ Shares is set out in Section 6.1 in Part B of this IAC.
(b) Historical market price performance of IJ Shares
The Offer Price represents: (i) a discount of between 37.84% to 53.06% (or between RM0.14 to RM0.26)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares up to the Acquisition LTD;
(ii) a discount of between 30.30% to 43.90% (or between RM0.10 to RM0.18)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares
EXECUTIVE SUMMARY (Cont’d)
3
3. DETAILS OF ACCEPTANCES
As disclosed in the Offer Document, as at the Offer Document LPD, the Offeror has received irrevocable undertakings from the existing substantial shareholders of Ideal Jacobs, namely Andrew Conrad Jacobs and Dato’ Meng Bin, that they will not accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD. Save as disclosed above, the Offeror has not received any irrevocable undertakings from any Holder to accept or reject the Offer and/or acceptances of the Offer from any Holder. As at the LPD, there is no announcement made by Kenanga IB, on behalf of the Offeror of any acceptance of the Offer Shares.
4. EVALUATION OF THE OFFER
In arriving at its conclusion and recommendation, M&A Securities has assessed the fairness and reasonableness of the Offer in accordance with Paragraphs 1 to 6 under Schedule 2: Part III of the Rules, where the term “fair and reasonable” should generally be analysed as 2 distinct criteria, i.e. whether the offer is “fair” and whether the offer is “reasonable”, rather than as composite term.
4.1 Fairness evaluation of the Offer
(a) Valuation of the entire equity interest in Ideal Jacobs
Upon the completion of the Acquisition and Disposal, Ideal Jacobs will assume the entire business of the Widad Builders Group and will no longer continue with its existing manufacturing, fabrication and trading businesses. Therefore, in arriving at the fair value of IJ Shares, M&A Securities has adopted the SOPV model as the sole valuation method, which comprises a DCF valuation of the FCFE to be generated from the core business activities of the Widad Builders Group, and adding the value of assets which are not utilised in the core business activities of the Widad Builders Group. M&A Securities views that the SOPV model to be the most appropriate method to estimate the value of the Shares for the reasons as set out in Section 6 in Part B of this IAC. Based on the SOPV method, M&A Securities has derived an estimated fair value for the entire equity interest in Ideal Jacobs of approximately RM703.6 million to RM751.2 million or a fair value per IJ Share of between RM0.2868 to RM0.3060. Further information on the assessment on the valuation of the IJ Shares is set out in Section 6.1 in Part B of this IAC.
(b) Historical market price performance of IJ Shares
The Offer Price represents: (i) a discount of between 37.84% to 53.06% (or between RM0.14 to RM0.26)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares up to the Acquisition LTD;
(ii) a discount of between 30.30% to 43.90% (or between RM0.10 to RM0.18)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares
EXECUTIVE SUMMARY (Cont’d)
3
3. DETAILS OF ACCEPTANCES
As disclosed in the Offer Document, as at the Offer Document LPD, the Offeror has received irrevocable undertakings from the existing substantial shareholders of Ideal Jacobs, namely Andrew Conrad Jacobs and Dato’ Meng Bin, that they will not accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD. Save as disclosed above, the Offeror has not received any irrevocable undertakings from any Holder to accept or reject the Offer and/or acceptances of the Offer from any Holder. As at the LPD, there is no announcement made by Kenanga IB, on behalf of the Offeror of any acceptance of the Offer Shares.
4. EVALUATION OF THE OFFER
In arriving at its conclusion and recommendation, M&A Securities has assessed the fairness and reasonableness of the Offer in accordance with Paragraphs 1 to 6 under Schedule 2: Part III of the Rules, where the term “fair and reasonable” should generally be analysed as 2 distinct criteria, i.e. whether the offer is “fair” and whether the offer is “reasonable”, rather than as composite term.
4.1 Fairness evaluation of the Offer
(a) Valuation of the entire equity interest in Ideal Jacobs
Upon the completion of the Acquisition and Disposal, Ideal Jacobs will assume the entire business of the Widad Builders Group and will no longer continue with its existing manufacturing, fabrication and trading businesses. Therefore, in arriving at the fair value of IJ Shares, M&A Securities has adopted the SOPV model as the sole valuation method, which comprises a DCF valuation of the FCFE to be generated from the core business activities of the Widad Builders Group, and adding the value of assets which are not utilised in the core business activities of the Widad Builders Group. M&A Securities views that the SOPV model to be the most appropriate method to estimate the value of the Shares for the reasons as set out in Section 6 in Part B of this IAC. Based on the SOPV method, M&A Securities has derived an estimated fair value for the entire equity interest in Ideal Jacobs of approximately RM703.6 million to RM751.2 million or a fair value per IJ Share of between RM0.2868 to RM0.3060. Further information on the assessment on the valuation of the IJ Shares is set out in Section 6.1 in Part B of this IAC.
(b) Historical market price performance of IJ Shares
The Offer Price represents: (i) a discount of between 37.84% to 53.06% (or between RM0.14 to RM0.26)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares up to the Acquisition LTD;
(ii) a discount of between 30.30% to 43.90% (or between RM0.10 to RM0.18)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares
EXECUTIVE SUMMARY (Cont’d)
3
3. DETAILS OF ACCEPTANCES
As disclosed in the Offer Document, as at the Offer Document LPD, the Offeror has received irrevocable undertakings from the existing substantial shareholders of Ideal Jacobs, namely Andrew Conrad Jacobs and Dato’ Meng Bin, that they will not accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD. Save as disclosed above, the Offeror has not received any irrevocable undertakings from any Holder to accept or reject the Offer and/or acceptances of the Offer from any Holder. As at the LPD, there is no announcement made by Kenanga IB, on behalf of the Offeror of any acceptance of the Offer Shares.
4. EVALUATION OF THE OFFER
In arriving at its conclusion and recommendation, M&A Securities has assessed the fairness and reasonableness of the Offer in accordance with Paragraphs 1 to 6 under Schedule 2: Part III of the Rules, where the term “fair and reasonable” should generally be analysed as 2 distinct criteria, i.e. whether the offer is “fair” and whether the offer is “reasonable”, rather than as composite term.
4.1 Fairness evaluation of the Offer
(a) Valuation of the entire equity interest in Ideal Jacobs
Upon the completion of the Acquisition and Disposal, Ideal Jacobs will assume the entire business of the Widad Builders Group and will no longer continue with its existing manufacturing, fabrication and trading businesses. Therefore, in arriving at the fair value of IJ Shares, M&A Securities has adopted the SOPV model as the sole valuation method, which comprises a DCF valuation of the FCFE to be generated from the core business activities of the Widad Builders Group, and adding the value of assets which are not utilised in the core business activities of the Widad Builders Group. M&A Securities views that the SOPV model to be the most appropriate method to estimate the value of the Shares for the reasons as set out in Section 6 in Part B of this IAC. Based on the SOPV method, M&A Securities has derived an estimated fair value for the entire equity interest in Ideal Jacobs of approximately RM703.6 million to RM751.2 million or a fair value per IJ Share of between RM0.2868 to RM0.3060. Further information on the assessment on the valuation of the IJ Shares is set out in Section 6.1 in Part B of this IAC.
(b) Historical market price performance of IJ Shares
The Offer Price represents: (i) a discount of between 37.84% to 53.06% (or between RM0.14 to RM0.26)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares up to the Acquisition LTD;
(ii) a discount of between 30.30% to 43.90% (or between RM0.10 to RM0.18)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares
EXECUTIVE SUMMARY (Cont’d)
3
3. DETAILS OF ACCEPTANCES
As disclosed in the Offer Document, as at the Offer Document LPD, the Offeror has received irrevocable undertakings from the existing substantial shareholders of Ideal Jacobs, namely Andrew Conrad Jacobs and Dato’ Meng Bin, that they will not accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD. Save as disclosed above, the Offeror has not received any irrevocable undertakings from any Holder to accept or reject the Offer and/or acceptances of the Offer from any Holder. As at the LPD, there is no announcement made by Kenanga IB, on behalf of the Offeror of any acceptance of the Offer Shares.
4. EVALUATION OF THE OFFER
In arriving at its conclusion and recommendation, M&A Securities has assessed the fairness and reasonableness of the Offer in accordance with Paragraphs 1 to 6 under Schedule 2: Part III of the Rules, where the term “fair and reasonable” should generally be analysed as 2 distinct criteria, i.e. whether the offer is “fair” and whether the offer is “reasonable”, rather than as composite term.
4.1 Fairness evaluation of the Offer
(a) Valuation of the entire equity interest in Ideal Jacobs
Upon the completion of the Acquisition and Disposal, Ideal Jacobs will assume the entire business of the Widad Builders Group and will no longer continue with its existing manufacturing, fabrication and trading businesses. Therefore, in arriving at the fair value of IJ Shares, M&A Securities has adopted the SOPV model as the sole valuation method, which comprises a DCF valuation of the FCFE to be generated from the core business activities of the Widad Builders Group, and adding the value of assets which are not utilised in the core business activities of the Widad Builders Group. M&A Securities views that the SOPV model to be the most appropriate method to estimate the value of the Shares for the reasons as set out in Section 6 in Part B of this IAC. Based on the SOPV method, M&A Securities has derived an estimated fair value for the entire equity interest in Ideal Jacobs of approximately RM703.6 million to RM751.2 million or a fair value per IJ Share of between RM0.2868 to RM0.3060. Further information on the assessment on the valuation of the IJ Shares is set out in Section 6.1 in Part B of this IAC.
(b) Historical market price performance of IJ Shares
The Offer Price represents: (i) a discount of between 37.84% to 53.06% (or between RM0.14 to RM0.26)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares up to the Acquisition LTD;
(ii) a discount of between 30.30% to 43.90% (or between RM0.10 to RM0.18)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares
EXECUTIVE SUMMARY (Cont’d)
3
3. DETAILS OF ACCEPTANCES
As disclosed in the Offer Document, as at the Offer Document LPD, the Offeror has received irrevocable undertakings from the existing substantial shareholders of Ideal Jacobs, namely Andrew Conrad Jacobs and Dato’ Meng Bin, that they will not accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD. Save as disclosed above, the Offeror has not received any irrevocable undertakings from any Holder to accept or reject the Offer and/or acceptances of the Offer from any Holder. As at the LPD, there is no announcement made by Kenanga IB, on behalf of the Offeror of any acceptance of the Offer Shares.
4. EVALUATION OF THE OFFER
In arriving at its conclusion and recommendation, M&A Securities has assessed the fairness and reasonableness of the Offer in accordance with Paragraphs 1 to 6 under Schedule 2: Part III of the Rules, where the term “fair and reasonable” should generally be analysed as 2 distinct criteria, i.e. whether the offer is “fair” and whether the offer is “reasonable”, rather than as composite term.
4.1 Fairness evaluation of the Offer
(a) Valuation of the entire equity interest in Ideal Jacobs
Upon the completion of the Acquisition and Disposal, Ideal Jacobs will assume the entire business of the Widad Builders Group and will no longer continue with its existing manufacturing, fabrication and trading businesses. Therefore, in arriving at the fair value of IJ Shares, M&A Securities has adopted the SOPV model as the sole valuation method, which comprises a DCF valuation of the FCFE to be generated from the core business activities of the Widad Builders Group, and adding the value of assets which are not utilised in the core business activities of the Widad Builders Group. M&A Securities views that the SOPV model to be the most appropriate method to estimate the value of the Shares for the reasons as set out in Section 6 in Part B of this IAC. Based on the SOPV method, M&A Securities has derived an estimated fair value for the entire equity interest in Ideal Jacobs of approximately RM703.6 million to RM751.2 million or a fair value per IJ Share of between RM0.2868 to RM0.3060. Further information on the assessment on the valuation of the IJ Shares is set out in Section 6.1 in Part B of this IAC.
(b) Historical market price performance of IJ Shares
The Offer Price represents: (i) a discount of between 37.84% to 53.06% (or between RM0.14 to RM0.26)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares up to the Acquisition LTD;
(ii) a discount of between 30.30% to 43.90% (or between RM0.10 to RM0.18)
over the 5 day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares
3
EXECUTIVE SUMMARY (Cont’d)
4
up to the Notice LTD; and (iii) a discount of 23.33% and 25.81% (or RM0.07 and RM0.08) to the last traded
price of IJ Shares as at the LPD and 5 day VWAMP of IJ Shares up to and including the LPD respectively.
As the Offer Price of RM0.23 is:
(a) lower than and represents a discount of RM0.06 to RM0.08 or 19.80% to
24.84% over the estimated fair value per IJ Share of RM0.2868 to RM0.3060 derived from the SOPV method of valuation in (a) above; and
(b) represents a discount of between RM0.07 to RM0.26 or 23.33% to 53.06%
to the historical market price of IJ Shares as set out in (b) above,
the Offer is NOT FAIR.
Notwithstanding the above, we wish to highlight that our evaluation is strictly premised on the assumption that the Acquisition, Placement and Disposal will be completed. As at the LPD, the management of Ideal Jacobs and M&A Securities are not aware of any factors and/or circumstances which may substantially affect the timeline for completion of the Acquisition, Placement and Disposal.
Nevertheless, the Holders are advised to read the ensuing sections of this IAC for a comprehensive evaluation of the Offer and not to rely solely on the above valuations of the IJ Shares as the sole criteria when assessing the Offer.
4.2 Reasonableness evaluation of the Offer
We note that: (a) the Offeror intends to maintain the listing status of Ideal Jacobs on the ACE Market of
Bursa Securities, thereby allowing the Holders to sell their IJ Shares in the open market after the Closing Date;
(b) the Offeror does not intend to invoke the provisions of Section 222(1) of the CMSA to
compulsorily acquire any outstanding Offer Shares for which valid acceptances have not been received prior to the Closing Date; and
(c) Holders who choose to reject the Offer will receive free Warrants which will allow
them to participate in the potential upside of Ideal Jacobs moving forward. Premised on the above, we are of the view that the Offer is NOT REASONABLE.
The rest of this page is intentionally left blank
4
EXECUTIVE SUMMARY (Cont’d)
5
5. RECOMMENDATION
Premised on the above evaluation, M&A Securities is of the opinion that the Offer is NOT FAIR and NOT REASONABLE. Accordingly, M&A Securities recommends that the Holders REJECT the Offer. Please refer to Section 10 in Part B of this IAC for further details. Nonetheless, Holders are advised to closely monitor the announcements made by the Offeror and market price of IJ Shares prior to the Closing Date before making the decision as to whether to accept or reject the Offer. The Directors of Ideal Jacobs, after careful assessment of the terms and conditions of the Offer as contained in the Offer Document and the evaluation as contained in this IAC, have CONCURRED with the opinion of the Independent Adviser that the Offer is NOT FAIR and NOT REASONABLE. Accordingly, the Directors also concur with the Independent Adviser’s recommendation that you REJECT the Offer.
6. IMPORTANT DATES AND EVENTS
The important relevant dates in relation to the Offer are as follows:
Event Date
Date of the Notice 12 February 2018
Despatch of the Offer Document 5 March 2018
Issuance of this IAC 15 March 2018
First Closing Date(1) 26 March 2018 Note: (1) The Offer will remain open for acceptances until 5.00 p.m. (Malaysian time) on the
First Closing Date unless extended in accordance with the Rules or as the Offeror may decide and announced by Kenanga IB, on behalf of the Offeror, no later than 2 days before the Closing Date. Notices of such extension will be posted to you accordingly.
The rest of this page is intentionally left blank
5
LETTER FROM THE BOARD
7
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
Registered Office
Level 15-2, Bangunan Faber Imperial Court
Jalan Sultan Ismail 50250 Kuala Lumpur
15 March 2018
Board of Directors: Andrew Conrad Jacobs (Executive Chairman) Dato’ Meng Bin (Chief Executive Officer and Managing Director) Koong Lin Loong (Independent Non-Executive Director) Hing Kim Tat (Independent Non-Executive Director) Tan Kean Huat (Independent Non-Executive Director) Rizvi Bin Abd Halim (Independent Non-Executive Director) To: The Holders Dear Sir/Madam, UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR THROUGH KENANGA IB TO ACQUIRE ALL THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.23 PER OFFER SHARE 1. INTRODUCTION
On 5 June 2017, Ideal Jacobs entered into the HOA with WBGSB for the Acquisition. On 18 August 2017, Ideal Jacobs and WBGSB entered into the Acquisition SPA. Under the Acquisition SPA, the purchase consideration of RM520 million for the Acquisition is to be satisfied through cash (RM110 million) and the issuance of the Consideration Shares at the Consideration Issue Price (RM410 million). In conjunction with the Acquisition, Ideal Jacobs is also undertaking the other Proposals, which comprise: (a) disposal of Ideal Jacobs (HK) Corporation Ltd, Ideal Jacobs (Xiamen) Corporation,
Xiamen Ideal Jacobs International Ltd Company and Suzhou Ideal Jacobs Corporation for a cash consideration of RM28.0 million, that is, the Disposal;
(b) private placement of up to 534,032,115 new IJ Shares representing 25% of the enlarged total issued share capital of Ideal Jacobs upon completion of the Acquisition at an issue price to be determined later, that is, the Placement;
LETTER FROM THE BOARD
7
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
Registered Office
Level 15-2, Bangunan Faber Imperial Court
Jalan Sultan Ismail 50250 Kuala Lumpur
15 March 2018
Board of Directors: Andrew Conrad Jacobs (Executive Chairman) Dato’ Meng Bin (Chief Executive Officer and Managing Director) Koong Lin Loong (Independent Non-Executive Director) Hing Kim Tat (Independent Non-Executive Director) Tan Kean Huat (Independent Non-Executive Director) Rizvi Bin Abd Halim (Independent Non-Executive Director) To: The Holders Dear Sir/Madam, UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR THROUGH KENANGA IB TO ACQUIRE ALL THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.23 PER OFFER SHARE 1. INTRODUCTION
On 5 June 2017, Ideal Jacobs entered into the HOA with WBGSB for the Acquisition. On 18 August 2017, Ideal Jacobs and WBGSB entered into the Acquisition SPA. Under the Acquisition SPA, the purchase consideration of RM520 million for the Acquisition is to be satisfied through cash (RM110 million) and the issuance of the Consideration Shares at the Consideration Issue Price (RM410 million). In conjunction with the Acquisition, Ideal Jacobs is also undertaking the other Proposals, which comprise: (a) disposal of Ideal Jacobs (HK) Corporation Ltd, Ideal Jacobs (Xiamen) Corporation,
Xiamen Ideal Jacobs International Ltd Company and Suzhou Ideal Jacobs Corporation for a cash consideration of RM28.0 million, that is, the Disposal;
(b) private placement of up to 534,032,115 new IJ Shares representing 25% of the enlarged total issued share capital of Ideal Jacobs upon completion of the Acquisition at an issue price to be determined later, that is, the Placement;
LETTER FROM THE BOARD
7
IDEAL JACOBS (MALAYSIA) CORPORATION BHD
(Company No. 857363-U) (Incorporated in Malaysia under the Companies Act, 1965)
Registered Office
Level 15-2, Bangunan Faber Imperial Court
Jalan Sultan Ismail 50250 Kuala Lumpur
15 March 2018
Board of Directors: Andrew Conrad Jacobs (Executive Chairman) Dato’ Meng Bin (Chief Executive Officer and Managing Director) Koong Lin Loong (Independent Non-Executive Director) Hing Kim Tat (Independent Non-Executive Director) Tan Kean Huat (Independent Non-Executive Director) Rizvi Bin Abd Halim (Independent Non-Executive Director) To: The Holders Dear Sir/Madam, UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR THROUGH KENANGA IB TO ACQUIRE ALL THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.23 PER OFFER SHARE 1. INTRODUCTION
On 5 June 2017, Ideal Jacobs entered into the HOA with WBGSB for the Acquisition. On 18 August 2017, Ideal Jacobs and WBGSB entered into the Acquisition SPA. Under the Acquisition SPA, the purchase consideration of RM520 million for the Acquisition is to be satisfied through cash (RM110 million) and the issuance of the Consideration Shares at the Consideration Issue Price (RM410 million). In conjunction with the Acquisition, Ideal Jacobs is also undertaking the other Proposals, which comprise: (a) disposal of Ideal Jacobs (HK) Corporation Ltd, Ideal Jacobs (Xiamen) Corporation,
Xiamen Ideal Jacobs International Ltd Company and Suzhou Ideal Jacobs Corporation for a cash consideration of RM28.0 million, that is, the Disposal;
(b) private placement of up to 534,032,115 new IJ Shares representing 25% of the enlarged total issued share capital of Ideal Jacobs upon completion of the Acquisition at an issue price to be determined later, that is, the Placement;
7
PART A – LETTER FROM THE BOARD (Cont’d)
8
(c) issuance of free warrants on the basis of 1 warrant for every 5 existing IJ Shares held upon completion of the Acquisition, Disposal and Placement at an entitlement date and exercise price to be determined later, that is, the Free Warrants Issue; and
(d) amendment to its Memorandum of Association, that is, the Amendment.
Ideal Jacobs’ shareholders had approved the Proposals at its extraordinary general meeting held on 29 January 2018. Please refer to Ideal Jacobs’ circular to shareholders dated 4 January 2018 for further information on the Proposals.
Upon the issuance of the Consideration Shares and before the Placement, WBGSB's shareholding in Ideal Jacobs will increase from nil to 92.87% and the collective shareholdings of the Offeror and Joint Ultimate Offerors will increase from 0.53% to 92.91%.
Therefore, the Offeror is obligated to extend the Offer to acquire the Offer Shares that are not already held by the Offeror and Joint Ultimate Offerors pursuant to Section 218(2) of the CMSA and Paragraph 4.01(a) of the Rules at a cash consideration of RM0.23 per Offer Share, which is equal to the Consideration Issue Price. On 12 February 2018, the Acquisition SPA became unconditional. On even date, Kenanga IB, on the Offeror’s behalf, served the Notice on the IJ Board informing them of the Offeror’s obligation to undertake the Offer. On the same day, the Offeree announced the receipt of the Notice, a copy of which was sent to you on 14 February 2018. On 14 February 2018, in accordance with Paragraph 3.06 of the Rules, the Offeree announced the appointment of M&A Securities as the Independent Adviser to advise the IJ Board and the Holders on the fairness and reasonableness of the Offer. The Joint Ultimate Offerors for the Offer are Tan Sri Ikmal and Puan Sri Jamilah. There are no persons acting in concert (as defined in Section 216 of the CMSA) with the Offeror pursuant to the Offer. The details of the shareholdings of the Offeror and Joint Ultimate Offerors upon the completion of the Acquisition are as follows:
Direct Indirect
Name No. of IJ
Shares % No. of IJ
Shares % Offeror WBGSB 1,782,608,695 92.87 - - Joint Ultimate Offeror Tan Sri Ikmal (1)726,800 0.53 (2)1,782,608,695 92.87 Puan Sri Jamilah - - (3)1,783,335,495 92.91 Note: (1) Being Tan Sri Ikmal’s existing shareholdings in Ideal Jacobs as at the LPD.
(2) Deemed interested by virtue of his interest in WBGSB pursuant to Section 8(4) of the Act.
(3) Deemed interested by virtue of her interest in WBGSB pursuant to Section 8(4) of the Act and
the shareholding of her spouse, Tan Sri Ikmal, pursuant to Section 59(11)(c) of the Act.
8
PART A – LETTER FROM THE BOARD (Cont’d)
9
In addition to this IAC, you should have by now received a copy of the Offer Document dated 5 March 2018, which sets out the details, terms and conditions of the Offer as well as the procedures for acceptance and method of settlement of the Offer. On 14 March 2018, the SC notified that it has no further comments to the contents of this IAC. However, such notification shall not be taken to suggest that the SC agrees with the recommendations contained herein or assumes responsibility for the correctness of any statements made or opinions or reports expressed in this IAC. The purpose of this IAC is to provide you with the relevant information on the Offer, Directors’ views and recommendation on the Offer as well as the recommendation of M&A Securities. You are advised to read both this IAC and the Offer Document and carefully consider the recommendations contained herein before taking any action.
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are set out in Section 2 in Part B of this IAC. Please refer to Appendix I of the Offer Document for the full terms and conditions of the Offer as well as Appendix II of the Offer Document for the procedures for acceptance and method of settlement of the Offer.
3. DETAILS OF ACCEPTANCES
As disclosed in the Offer Document, as at the Offer Document LPD, the Offeror has received irrevocable undertakings from the existing substantial shareholders of Ideal Jacobs, namely Andrew Conrad Jacobs and Dato’ Meng Bin, that they will not accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD. Save for the foregoing, the Offeror has not received any irrevocable undertakings from any Holder to accept or reject the Offer and/or acceptances of the Offer from any Holder. As at the LPD, there is no announcement made by Kenanga IB, on behalf of the Offeror of any acceptance of the Offer Shares.
4. DIRECTORS’ VIEWS
4.1 Rationale of the Offer The Directors have noted the rationale for the Offer as set out in Section 3 of the Offer Document: (a) the Offer is a mandatory obligation pursuant to the Rules as the SPA has become
unconditional. The Offeror’s shareholding in Ideal Jacobs will increase from 0.53% to approximately 92.91% of the total number of issued Shares following the Acquisition; and
(b) the Offeror’s aim to increase its shareholding in Ideal Jacobs is to gain statutory control
in Ideal Jacobs as it recognises the long-term prospects of Ideal Jacobs. Through the Offeror’s controlling interest in Ideal Jacobs, the Joint Ultimate Offerors will have the ability to determine Ideal Jacobs’ strategic direction and flexibility to effect the necessary changes in view of its new core businesses. The Offeror will endeavour to grow Ideal Jacobs’ businesses by, among others, exploring synergies with the WBGSB group of companies.
9
PART A – LETTER FROM THE BOARD (Cont’d)
10
The Directors also take note that the rationale of the Offer is in line with the rationale of the Proposals, for which the Directors have recommended the Ideal Jacobs’ shareholders vote in favour at the extraordinary general meeting held on 29 January 2018. As such, the Directors are of the view that the Offeror’s plans of gaining statutory control of Ideal Jacobs is in the best interests of the New IJ Group moving forward.
4.2 Future plans for Ideal Jacobs and its subsidiaries and their employees The Directors have noted the following intentions of the Offeror in respect of the future plans and employees of the IJ Group as stated in Section 5 of the Offer Document, where the Offeror: (a) does not intend to continue with its existing manufacturing, fabrication and trading
businesses, and the New IJ Group will instead be principally involved in construction and IFM activities. Nevertheless, the Offeror may review the New IJ Group’s businesses and operations from time to time and make any arrangements, rationalisation and reorganisation of the New IJ Group that the Offeror considers suitable, including exploring synergistic opportunities with the WBGSB group of companies, to facilitate the future growth of the New IJ Group’s businesses and operations;
(b) does not have plans to introduce any other major change in the New IJ Group’s
businesses, liquidate any of the companies within the New IJ Group, dispose of any other major assets or undertake any major redeployment of fixed assets of the New IJ Group beyond the changes to the existing IJ Group which are consequential to the Acquisition and Disposal. Nevertheless, the Offeror may from time to time review strategic options with regard to the New IJ Group’s future business and operations and implement changes with a view to ensuring that the New IJ Group remains competitive or to improve its prospects and future growth. As at the Offer Document LPD, save for the Acquisition and Disposal, the Offeror has no other knowledge of and has not entered into any negotiation, arrangement or understanding with any third party that will cause any significant change in the New IJ Group’s businesses, assets or shareholding structure; and
(c) has no plans to dismiss or make redundant any of the existing IJ Group’s employees as a direct consequence of the Offer. Upon the completion of the Disposal, IJ Group’s current employees will continue to be employed under the respective Disposal Subsidiaries, which will not be part of the New IJ Group. In line with the above, Widad Builders Groups’ employees will become employees under the New IJ Group. Nevertheless, the Offeror may propose constructive measures from time to time to enhance the New IJ Group’s operational efficiency and optimise its staff productivity, subject to IJ Board’s decisions made in the best interest of the New IJ Group.
The Directors take note of the above and it is envisaged that the financial performance, financial position and business prospects of the New IJ Group will remain sound and continue as a going concern.
4.3 Listing status of Ideal Jacobs The Directors take note that the Offeror intends to maintain the listing status of Ideal Jacobs and that the Placement is intended to facilitate Ideal Jacobs’s compliance with the Public Spread Requirement. In addition, the Directors also note that WBGSB has undertaken to place out the Consideration Shares to qualifying third party investors to ensure that Ideal Jacobs meets the Public Spread Requirement (if not met after the Placement). Please refer to Section 7.1 in Part B of this IAC for further information.
10
PART A – LETTER FROM THE BOARD (Cont’d)
11
4.4 Compulsory acquisition
The Directors take note that the Offeror does not intend to invoke the provisions of Section 222(1) of the CMSA to compulsorily acquire any remaining Offer Shares, for which acceptances have not been received on or before the Closing Date even if the conditions stipulated in Section 222(1) of the CMSA are fulfilled. Please refer to Section 7.2 in Part B of this IAC for further information.
5. INDEPENDENT ADVICE LETTER
The Holders are advised to read and consider the views and recommendation of M&A Securities, the appointed Independent Adviser to provide comments, opinions, information and recommendation on the Offer to the Directors and the Holders. The IAL is included in Part B of this IAC.
6. DISCLOSURE OF DIRECTORS’ INTEREST
As at the LPD, save as disclosed below, the Directors of Ideal Jacobs do not have any interest (direct and indirect) in Ideal Jacobs’s issued share capital: Direct Indirect No. of IJ Shares % No. of IJ Shares %
Andrew Conrad Jacobs 1,289,900 0.94 (1)36,619,600 26.76 Dato’ Meng Bin 1,150,000 0.84 (2)17,436,400 12.74
Notes: (1) Deemed interested by virtue of his shareholdings in Ideal Jacobs Corporation and BAK
Investment LLC pursuant to Section 8(4) of the Act. (2) Deemed interested by virtue of his shareholdings of his spouse, Foo Chong Lee pursuant to
Section 59(11)(c) of the Act. As at the LPD, the existing Directors of our Company, namely Andrew Conrad Jacobs and Dato’ Meng Bin have both irrevocably undertaken not to participate in or accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD.
7. DIRECTORS’ RESPONSIBILITY STATEMENT
The Board has seen and approved the contents of this IAC. The Board, collectively and individually, accepts full responsibility for the accuracy and completeness of the information contained in this IAC and confirm, after having made all reasonable enquiries, that to the best of their knowledge and belief: (a) no statement and/or information relating to IJ Group in this IAC is false or misleading
or incomplete; (b) there are no other facts and/or information, the omission of which would render any
statement or information provided relating to IJ Group contained in this IAC false or misleading or incomplete;
(c) all material facts and/or information in relation to the Offer, including those required
under the Rules, have been accurately and completely disclosed in this IAC; and
PART A – LETTER FROM THE BOARD (Cont’d)
11
4.4 Compulsory acquisition
The Directors take note that the Offeror does not intend to invoke the provisions of Section 222(1) of the CMSA to compulsorily acquire any remaining Offer Shares, for which acceptances have not been received on or before the Closing Date even if the conditions stipulated in Section 222(1) of the CMSA are fulfilled. Please refer to Section 7.2 in Part B of this IAC for further information.
5. INDEPENDENT ADVICE LETTER
The Holders are advised to read and consider the views and recommendation of M&A Securities, the appointed Independent Adviser to provide comments, opinions, information and recommendation on the Offer to the Directors and the Holders. The IAL is included in Part B of this IAC.
6. DISCLOSURE OF DIRECTORS’ INTEREST
As at the LPD, save as disclosed below, the Directors of Ideal Jacobs do not have any interest (direct and indirect) in Ideal Jacobs’s issued share capital: Direct Indirect No. of IJ Shares % No. of IJ Shares %
Andrew Conrad Jacobs 1,289,900 0.94 (1)36,619,600 26.76 Dato’ Meng Bin 1,150,000 0.84 (2)17,436,400 12.74
Notes: (1) Deemed interested by virtue of his shareholdings in Ideal Jacobs Corporation and BAK
Investment LLC pursuant to Section 8(4) of the Act. (2) Deemed interested by virtue of his shareholdings of his spouse, Foo Chong Lee pursuant to
Section 59(11)(c) of the Act. As at the LPD, the existing Directors of our Company, namely Andrew Conrad Jacobs and Dato’ Meng Bin have both irrevocably undertaken not to participate in or accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD.
7. DIRECTORS’ RESPONSIBILITY STATEMENT
The Board has seen and approved the contents of this IAC. The Board, collectively and individually, accepts full responsibility for the accuracy and completeness of the information contained in this IAC and confirm, after having made all reasonable enquiries, that to the best of their knowledge and belief: (a) no statement and/or information relating to IJ Group in this IAC is false or misleading
or incomplete; (b) there are no other facts and/or information, the omission of which would render any
statement or information provided relating to IJ Group contained in this IAC false or misleading or incomplete;
(c) all material facts and/or information in relation to the Offer, including those required
under the Rules, have been accurately and completely disclosed in this IAC; and
PART A – LETTER FROM THE BOARD (Cont’d)
11
4.4 Compulsory acquisition
The Directors take note that the Offeror does not intend to invoke the provisions of Section 222(1) of the CMSA to compulsorily acquire any remaining Offer Shares, for which acceptances have not been received on or before the Closing Date even if the conditions stipulated in Section 222(1) of the CMSA are fulfilled. Please refer to Section 7.2 in Part B of this IAC for further information.
5. INDEPENDENT ADVICE LETTER
The Holders are advised to read and consider the views and recommendation of M&A Securities, the appointed Independent Adviser to provide comments, opinions, information and recommendation on the Offer to the Directors and the Holders. The IAL is included in Part B of this IAC.
6. DISCLOSURE OF DIRECTORS’ INTEREST
As at the LPD, save as disclosed below, the Directors of Ideal Jacobs do not have any interest (direct and indirect) in Ideal Jacobs’s issued share capital: Direct Indirect No. of IJ Shares % No. of IJ Shares %
Andrew Conrad Jacobs 1,289,900 0.94 (1)36,619,600 26.76 Dato’ Meng Bin 1,150,000 0.84 (2)17,436,400 12.74
Notes: (1) Deemed interested by virtue of his shareholdings in Ideal Jacobs Corporation and BAK
Investment LLC pursuant to Section 8(4) of the Act. (2) Deemed interested by virtue of his shareholdings of his spouse, Foo Chong Lee pursuant to
Section 59(11)(c) of the Act. As at the LPD, the existing Directors of our Company, namely Andrew Conrad Jacobs and Dato’ Meng Bin have both irrevocably undertaken not to participate in or accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD.
7. DIRECTORS’ RESPONSIBILITY STATEMENT
The Board has seen and approved the contents of this IAC. The Board, collectively and individually, accepts full responsibility for the accuracy and completeness of the information contained in this IAC and confirm, after having made all reasonable enquiries, that to the best of their knowledge and belief: (a) no statement and/or information relating to IJ Group in this IAC is false or misleading
or incomplete; (b) there are no other facts and/or information, the omission of which would render any
statement or information provided relating to IJ Group contained in this IAC false or misleading or incomplete;
(c) all material facts and/or information in relation to the Offer, including those required
under the Rules, have been accurately and completely disclosed in this IAC; and
PART A – LETTER FROM THE BOARD (Cont’d)
11
4.4 Compulsory acquisition
The Directors take note that the Offeror does not intend to invoke the provisions of Section 222(1) of the CMSA to compulsorily acquire any remaining Offer Shares, for which acceptances have not been received on or before the Closing Date even if the conditions stipulated in Section 222(1) of the CMSA are fulfilled. Please refer to Section 7.2 in Part B of this IAC for further information.
5. INDEPENDENT ADVICE LETTER
The Holders are advised to read and consider the views and recommendation of M&A Securities, the appointed Independent Adviser to provide comments, opinions, information and recommendation on the Offer to the Directors and the Holders. The IAL is included in Part B of this IAC.
6. DISCLOSURE OF DIRECTORS’ INTEREST
As at the LPD, save as disclosed below, the Directors of Ideal Jacobs do not have any interest (direct and indirect) in Ideal Jacobs’s issued share capital: Direct Indirect No. of IJ Shares % No. of IJ Shares %
Andrew Conrad Jacobs 1,289,900 0.94 (1)36,619,600 26.76 Dato’ Meng Bin 1,150,000 0.84 (2)17,436,400 12.74
Notes: (1) Deemed interested by virtue of his shareholdings in Ideal Jacobs Corporation and BAK
Investment LLC pursuant to Section 8(4) of the Act. (2) Deemed interested by virtue of his shareholdings of his spouse, Foo Chong Lee pursuant to
Section 59(11)(c) of the Act. As at the LPD, the existing Directors of our Company, namely Andrew Conrad Jacobs and Dato’ Meng Bin have both irrevocably undertaken not to participate in or accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD.
7. DIRECTORS’ RESPONSIBILITY STATEMENT
The Board has seen and approved the contents of this IAC. The Board, collectively and individually, accepts full responsibility for the accuracy and completeness of the information contained in this IAC and confirm, after having made all reasonable enquiries, that to the best of their knowledge and belief: (a) no statement and/or information relating to IJ Group in this IAC is false or misleading
or incomplete; (b) there are no other facts and/or information, the omission of which would render any
statement or information provided relating to IJ Group contained in this IAC false or misleading or incomplete;
(c) all material facts and/or information in relation to the Offer, including those required
under the Rules, have been accurately and completely disclosed in this IAC; and
11
PART A – LETTER FROM THE BOARD (Cont’d)
12
(d) opinions expressed by the Directors in this IAC have been arrived at after due and careful consideration.
Further, the responsibility of the Board in respect of:
(a) the information relating to the Offeror, Joint Ultimate Offeror and the Offer (as
extracted from the Offer Document) is to ensure that such information is accurately reproduced in this IAC; and
(b) the independent advice and expression of opinion by M&A Securities in relation to the
Offer as set out in the IAL, is to ensure that accurate information in relation to IJ Group was provided to M&A Securities for its evaluation of the Offer and that all information in relation to IJ Group that is relevant to M&A Securities’ evaluation of the Offer has been accurately and completely disclosed to M&A Securities and that there is no material fact, the omission of which would make any information provided to M&A Securities false or misleading.
8. DIRECTORS’ RECOMMENDATION
After considering all aspects of the Offer such as fairness and reasonableness of the Offer and the evaluation and recommendation by M&A Securities as set out in Part B of this IAC, the Directors have CONCURRED with the opinion of M&A Securities that the Offer is NOT FAIR and NOT REASONABLE. Accordingly, the Directors also concur with M&A Securities’ recommendation that you REJECT the Offer. YOU ARE ADVISED TO CAREFULLY CONSIDER THE INFORMATION CONTAINED IN THE OFFER DOCUMENT AND THIS IAC BEFORE MAKING A DECISION AS TO THE COURSE OF ACTION TO BE TAKEN. THE DIRECTORS HAVE NOT TAKEN INTO CONSIDERATION ANY SPECIFIC OBJECTIVES, FINANCIAL SITUATION, RISK PROFILE AND PARTICULAR NEEDS OF ANY INDIVIDUAL HOLDER OR ANY SPECIFIC GROUP OF HOLDERS.
THE DIRECTORS RECOMMEND THAT HOLDERS, WHO REQUIRE ADVICE IN RELATION TO THE OFFER IN THE CONTEXT OF THEIR INVESTMENT OBJECTIVES, FINANCIAL SITUATION, RISK PROFILE OR PARTICULAR NEEDS, SHOULD CONSULT THEIR RESPECTIVE STOCKBROKER, SOLICITOR, ACCOUNTANT, BANK MANAGER OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
Yours faithfully For and on behalf of the Board of IDEAL JACOBS (MALAYSIA) CORPORATION BHD ANDREW CONRAD JACOBS Executive Chairman
12
14
M & A SECURITIES SDN BHD (15017-H) ( A Wholly-Owned Subsidiary of INSAS BHD )
A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BERHAD Principal Office
Level 1 - 3, No. 45 & 47, Level 11, No. 45 & 47 (Corporate Finance) and No. 43-6, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia
Tel : +603-2282 1820 (GL) +603-2284 2911 (CF) Fax : +603-2283 1019 (Admin) +603-2284 2718 (CF)
Registered Office:
Level 1 & 2, No. 45 & 47 and Level 3, No. 45, The Boulevard
Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur
15 March 2018
To: The Holders Dear Sir/Madam, UNCONDITIONAL MANDATORY TAKE-OVER OFFER BY THE OFFEROR THROUGH KENANGA IB TO ACQUIRE ALL THE OFFER SHARES FOR A CASH OFFER PRICE OF RM0.23 PER OFFER SHARE 1. INTRODUCTION
Please refer to Section 1 in Part A of this IAC for the sequence of events in relation to the Offer. M&A Securities was appointed by the Board on 14 February 2018 as Independent Adviser for the Offer. On the same day, M&A Securities declared to the SC its independence and eligibility to act as Independent Adviser for the Offer. The purpose of this IAL is to provide our independent evaluation of the Offer together within our recommendation thereon, subject to the scope of our role and limitations specified herein. WE ADVISE YOU TO READ AND UNDERSTAND THIS IAL CAREFULLY TOGETHER WITH PART A: LETTER FROM THE BOARD AND THE OFFER DOCUMENT, A COPY OF WHICH YOU SHOULD HAVE RECEIVED BY NOW, BEFORE TAKING ANY ACTION. IF YOU ARE IN ANY DOUBT AS TO THE COURSE OF ACTION YOU SHOULD TAKE IN RELATION TO THE OFFER, YOU SHOULD CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY.
14
15
2. SALIENT TERMS AND CONDITIONS OF THE OFFER
The salient terms and conditions of the Offer are set out below: 2.1 Consideration for the Offer
The Offeror will pay a cash consideration of RM0.23 per Offer Share to Accepting Holders. If you are entitled to retain any Distribution that Ideal Jacobs may declare, make or pay on or after the date of the Notice but before the Closing Date, the Offeror will reduce the Offer Price by an amount equivalent to the net Distribution per Offer Share that you are entitled to retain. As at the LPD, Ideal Jacobs has not declared any Distribution. You may accept the Offer for all or part of your Offer Shares. The Offeror will round down the cash consideration payable to an Accepting Holder to the nearest whole sen. The Offeror will not pay fractions of a sen, if any, to Accepting Holders.
2.2 Condition of the Offer The Offer is not conditional upon any minimum acceptance level as the Offeror and Joint Ultimate Offerors will collectively hold more than 50% of Ideal Jacobs’ voting shares upon the issuance of the Consideration Shares.
2.3 Duration of the Offer
The Offer will remain open for acceptances until 5:00 p.m. on 26 March 2018, that is, the Closing Date unless extended or revised by the Offeror in accordance with the Rules.
Please refer to Section 2 of Appendix I of the Offer Document for further details on the duration of the Offer.
2.4 Method of settlement
The Offeror will settle the consideration for the Offer Shares in the form of cheque, banker’s draft or cashier’s order which will be despatched to Accepting Holders or their designated agents by ordinary mail within 10 days from the date of receipt of the valid acceptances.
Please refer to Appendix I of the Offer Document for other terms and conditions of the Offer and Appendix II of the Offer Document for the procedures for acceptance and method of settlement of the consideration for the Offer Shares.
3. DETAILS OF ACCEPTANCES
As disclosed in the Offer Document, as at the Offer Document LPD, the Offeror has received irrevocable undertakings from the existing substantial shareholders of Ideal Jacobs, namely Andrew Conrad Jacobs and Dato’ Meng Bin, that they will not accept the Offer in respect of shares held directly and indirectly by them, which amounts in aggregate to 41.28% of Ideal Jacobs’ issued share capital as at the Offer Document LPD. Save as disclosed above, the Offeror has not received any irrevocable undertakings from any Holder to accept or reject the Offer and/or acceptances of the Offer from any Holder. As at the LPD, there is no announcement made by Kenanga IB, on behalf of the Offeror of any acceptance of the Offer Shares.
15
16
4. SCOPE AND LIMITATIONS TO THE EVALUATION OF THE OFFER
We have evaluated the Offer and in rendering our advice, we have considered various factors which we believe are of relevance and general importance to an assessment of the Offer and would be of general concern to the Holders. M&A Securities was not involved in any formulation, deliberations and/or negotiations pertaining to the terms and conditions of the Offer. Our scope as the Independent Adviser is limited to expressing an independent opinion on the Offer as to whether the Offer is fair and reasonable insofar as the Holders are concerned based on information and documents provided to us or which are available to us and making enquiries as were reasonable in the circumstances. In performing our evaluation, we have relied on the following sources of information: (a) information contained in the Notice, Offer Document and the appendices attached
thereto; (b) information provided by the Board and management of Ideal Jacobs as well as the
management of Widad Builders; (c) discussions with and representations by the Board and management of Ideal Jacobs
as well as the management of Widad Builders; (d) information contained in the circular to shareholders of Ideal Jacobs dated 4 January
2018 in relation to the Proposals; (e) audited consolidated financial statements of Ideal Jacobs for the FYE 31 December
2014, 31 December 2015 and 31 December 2016; (f) accountants’ report on the financial information of the Widad Builders Group for the
FYE 31 December 2014, 31 December 2015 and 31 December 2016; (g) other relevant information, documents, confirmations and representations furnished
to us by the Board and management of Ideal Jacobs, WBGSB and Widad Builders; and
(h) other publicly available information which we deem to be relevant. We have relied on the Board and management of Ideal Jacobs to take due care to ensure that all information, documents and representations provided by them to facilitate our evaluation of the Offer are accurate, valid and complete in all material aspects and has accepted full responsibility for the accuracy and completeness of the information provided to us. Nonetheless, we have made enquiries as were reasonable in the circumstances and as at the date hereof, we are satisfied that the information provided to us or which are available to us is sufficient and have no reason to believe that the aforementioned information is unreliable, incomplete, misleading and/or inaccurate. In rendering our advice, M&A Securities had taken note of pertinent factors, which we believe are necessary and of importance to our assessment of the Offer as set out in this IAL and therefore of general concern to the Holders. As such, M&A Securities’ views and recommendation as contained in the IAL are rendered solely for the benefit of the Holders as a whole and not for any specific group of Holders. In carrying out our evaluation, we have not taken into consideration any specific investment objectives, financial and tax situation, risk profile or particular needs of any individual Holder or any specific group of Holders. We recommend that any individual Holder who is in doubt as to the action to be taken or require advice in relation to the Offer in the context of their individual investment objectives, financial and tax situation, risk profile or particular needs
16
17
should consult their respective stockbroker, solicitor, accountant, banker or other professional advisers immediately. Our advice should be considered in the context of the entirety of this IAL. Our views expressed in this IAL are, amongst others, based on economic, market and other conditions prevailing, and the information and/or documents made available to us as at the LPD or such other period as specified herein. Such conditions may change significantly over a short period of time. We will notify the Holders by way of an announcement if, after despatching this IAC, as guided by Paragraph 11.07(1) of the Rules, we become aware that this IAC: (a) contains a material statement which is false or misleading; (b) contains a statement from which there is a material omission; or (c) does not contain a statement relating to a material development. If circumstances require, we shall send a supplementary IAC to the Holders in accordance with Paragraph 11.07(2) of the Rules.
5. EVALUATION OF THE OFFER
In arriving at our opinion and recommendation in respect of the Offer, we have assessed the fairness and reasonableness of the Offer in accordance with Paragraphs 1 to 6 under Schedule 2: Part III of the Rules whereby: (a) the term “fair and reasonable” should generally be analysed as 2 distinct criteria, i.e.
whether the Offer is “fair” and whether the Offer is “reasonable”, rather than as a composite term;
(b) the Offer is considered as “fair” if the Offer Price is equal to or higher than the market
price and is also equal to or higher than the value of the Offer Shares. However, if the Offer Price is equal to or higher than the market price but is lower than the value of the Offer Shares, the Offer is considered as “not fair”. In making the assessment, the value of the Offer Shares is determined based on the assumption that 100% of the Offeree is being acquired;
(c) in considering whether the Offer is “reasonable”, we have taken into consideration
matters other than the valuation of the Offer Shares; (d) generally, a take-over offer would be considered “reasonable” if it is “fair”.
Nevertheless, an independent adviser may also recommend for Holders to accept the take-over offer despite it being “not fair”, if the independent adviser is of the view that there are sufficiently strong reasons to accept the offer in the absence of a higher bid and such reasons should be clearly explained; and
(e) in the event the independent adviser concludes that a take-over offer is “not fair but
reasonable”, the independent adviser must clearly explain the following:
(i) what is meant by “not fair but reasonable”;
(ii) how has the independent adviser reached to this conclusion; and
(iii) the course of action that the Holders are recommended to take pursuant to the conclusion.
17
18
We have considered the following pertinent factors in our evaluation of the Offer: Fairness of the Offer - Valuation of the entire equity interest in Ideal Jacobs - Historical market price performance of IJ Shares
Section 6 Section 6.1 Section 6.2
Reasonableness of the Offer - Listing status - Compulsory acquisition and rights of Dissenting Holders - Free Warrants Issue
Section 7 Section 7.1 Section 7.2 Section 7.3
6. FAIRNESS EVALUATION OF THE OFFER
6.1 Valuation of the entire equity interest in Ideal Jacobs
As part of the Proposals, Ideal Jacobs will undertake the Disposal and will not continue with its existing manufacturing, fabrication and trading businesses. Instead, the New IJ Group will be principally involved in construction and IFM activities through the Widad Builders Group. For the avoidance of doubt, the Disposal and Acquisition are inter-conditional and to be completed simultaneously. Premised on the foregoing, the value of the New IJ Group is dependent on the value of the Widad Builders Group together with the value of any remaining assets available to the New IJ Group after the completion of the Disposal and Acquisition. Widad Builders Group is principally involved in the following 2 business segments: (a) construction business, which focused on infrastructure and civil works; and (b) IFM services, which involves the provision of management, operations and
maintenance services. We noted that the Widad Builders Group has existing on-going projects and projects under bidding with contracted value amounting to approximately RM1.3 billion and RM2.7 billion respectively. In this respect, we are of the view that the stream of future cash flows to be derived by the Widad Builders Group is predictable. Thus, we have adopted the SOPV of the New IJ Group as our sole valuation method in arriving at the fair value of the Ideal Jacobs, which will represent the fair value of IJ Shares, comprising: (a) the fair value of the Widad Builders Group, based on a DCF valuation on the FCFE to
be generated from the core business activities of the Widad Builders Group; and (b) value of assets which are not utilised in the core business activities of the Widad
Builders Group. The DCF valuation model considers both the time value of money and the future cash flows to be generated by the Widad Builders Group over a specified period of time. As the methodology entails the discounting of future cash flows to be generated from the Widad Builders Group’s businesses at a specified discount rate to arrive at the present value of the investment in the Widad Builders Group, the riskiness of generating such cash flows will also be taken into consideration. Under the DCF valuation method, the FCFE projected to be generated from the businesses of Widad Builders Group is discounted at its cost of equity to derive the present value of all future cash flows from Widad Builders Group attributable to Ideal Jacobs after the Acquisition.
18
19
We have reviewed the future financial information of Widad Builders Group until FYE 31 December 2022 (“Future Financials”), which was provided by the management of Widad Builders based on forecasts on a best-effort basis. We have considered and evaluated the key bases and assumptions adopted in the Future Financials and are satisfied that the key bases and assumptions used in the preparation of the Future Financials are reasonable given the prevailing circumstances and significant factors that are known as at the LPD. The Future Financials, together with the bases and assumptions adopted therein, have been reviewed and approved by the Board. The key bases and assumptions adopted in the preparation of the Future Financials are as follows: (a) the Widad Builders Group is a going concern and is expected to sustain its operations
into perpetuity; (b) in relation to the construction business, Widad Builders Group will be able to secure
sustainable amount of projects which are currently under bidding as well as new potential projects, and derive profits at its existing profit margins for such projects;
(c) in relation to the IFM business, Widad Builders Group will be able to renew the
current ongoing IFM contracts to perpetuity based on the existing contract values, and derive profits at its existing profit margins for such contracts;
(d) existing and future financing facilities at the projected level of financing cost will
remain available to the Widad Builders Group; (e) there will not be any significant or material changes in the principal activities,
operating policies, accounting policies, operational policies and business policies of the Widad Builders Group and the existing group structure of Widad Builders;
(f) there will not be any significant or material changes to the licenses and regulations
governing the business activities of the Widad Builders Group; (g) the current accounting policies adopted by the Widad Builders Group will remain
relevant and there will not be any significant changes in the accounting policies of the Widad Builders Group which have material impact on the financial performance and financial position of the Widad Builders Group; and
(h) there will not be any material changes in the political, social and economic conditions,
taxation, monetary and fiscal policies and inflation in Malaysia, and the regulatory requirements of the local construction and IFM industry.
In conjunction with the Acquisition, Ideal Jacobs will also undertake the Placement to satisfy the cash consideration for the Acquisition of RM110 million. Any proceeds raised in excess of the cash consideration are deemed as surplus assets of the New IJ Group. However, the Acquisition is not conditional upon the completion of Placement. In the event that the Placement is not completed, Ideal Jacobs will need to resort to other means to raise the funds required to satisfy the cash consideration of RM110 million. Notwithstanding the above, our evaluation of the entire equity interest in Ideal Jacobs is premised on the assumption that the Acquisition, Placement and Disposal will be completed.
The rest of this page is intentionally left blank
19
20
6.1.
1
Fair
valu
e of
the
Wid
ad B
uild
ers
Gro
up
In
ord
er to
der
ive
the
fair
valu
e of
the
Wid
ad B
uild
ers
Grou
p’s
busin
esse
s, w
e ha
ve d
iscou
nted
the
FCFE
pro
ject
ed to
be
gene
rate
d fro
m th
e sa
id b
usin
esse
s at
an
appr
opria
te c
ost
of e
quity
to
refle
ct t
he r
ate
of r
etur
n re
quire
d by
the
sha
reho
lder
s of
Wid
ad B
uild
ers.
Our
val
uatio
n,
toge
ther
with
the
key
base
s an
d as
sum
ptio
ns a
dopt
ed, a
re a
s fo
llow
s:-
No
Key
base
s an
d as
sum
ptio
ns
Des
crip
tions
(a)
FCFE
Ba
sed
on th
e Fu
ture
Fi
nanc
ials
until
the
FYE
31
Dece
mbe
r 202
2
FCFE
is t
he f
ree
cash
flo
ws
from
ope
ratio
ns a
vaila
ble
to t
he e
quity
hol
ders
of
a co
mpa
ny a
fter
taki
ng i
nto
cons
ider
atio
n al
l op
erat
ing
expe
nses
, m
ovem
ent
in
wor
king
capi
tal,
net i
nves
ting
cash
flow
s an
d ne
t fin
ancin
g ca
sh fl
ows.
W
e ha
ve r
evie
wed
the
key
bas
es a
nd a
ssum
ptio
ns a
dopt
ed i
n th
e Fu
ture
Fi
nanc
ials
prep
ared
by
the
man
agem
ent
of W
idad
Bui
lder
s in
der
ivin
g th
e FC
FE
and
are
satis
fied
that
the
y ar
e ap
prop
riate
and
rea
sona
ble
give
n th
e pr
evai
ling
circu
mst
ance
s an
d sig
nific
ant f
acto
rs th
at a
re k
now
n as
at t
he L
PD.
(b
) Co
st
of
equi
ty
(“K e
”)
9.75
% to
12.
96%
Co
st o
f eq
uity
rep
rese
nts
the
rate
of
retu
rn r
equi
red
by a
n in
vest
or o
n th
e ca
sh
flow
stre
ams
gene
rate
d gi
ven
the
risks
ass
ocia
ted
with
the
cash
flow
s. In
der
ivin
g th
e co
st o
f equ
ity f
or W
idad
Bui
lder
s, w
e ha
ve a
dopt
ed t
he C
apita
l Ass
et P
ricin
g M
odel
and
der
ived
an
estim
ated
cos
t of
equ
ity r
angi
ng f
rom
9.7
5% t
o 12
.96%
w
ith th
e fo
llow
ing
inpu
ts:-
K e
= R
f + β
(Rm –
Rf)
(c
) Ri
sk-fr
ee
rate
of
re
turn
(“R f
”)
3.92
%
Risk
-free
rat
e of
ret
urn
repr
esen
ts t
he e
xpec
ted
rate
of
retu
rn f
rom
a r
isk-fr
ee
inve
stm
ent.
The
close
st a
vaila
ble
appr
oxim
atio
n of
the
risk
-free
rat
e of
ret
urn
is th
e yie
ld o
f 10-
year
Mal
aysia
n Go
vern
men
t Sec
uriti
es.
As e
xtra
cted
from
Blo
ombe
rg, t
he s
aid
yield
is 3
.92%
per
ann
um a
s at
9 F
ebru
ary
2018
, bei
ng th
e la
st tr
adin
g da
y pr
ior t
o th
e da
te o
f ann
ounc
emen
t of t
he N
otice
.
(d)
Expe
cted
m
arke
t ra
te
of
retu
rn
(“R m
”)
10.5
9%
Expe
cted
mar
ket
rate
of
retu
rn r
epre
sent
s th
e ex
pect
ed r
ate
of r
etur
n fo
r in
vest
ing
in a
por
tfolio
con
sistin
g of
a w
eigh
ted
sum
of
asse
ts r
epre
sent
ing
the
entir
e eq
uity
mar
ket.
The
hist
orica
l rat
e of
ret
urn
for
FTSE
Bur
sa M
alay
sia T
op 1
00 I
ndex
is a
goo
d in
dica
tor
of th
e eq
uity
mar
ket r
etur
n in
Mal
aysia
. Giv
en th
e vo
latil
ity o
f the
sto
ck
mar
ket a
nd m
arke
t cyc
les,
we
view
that
a 1
0-ye
ar h
istor
ical r
ate
of r
etur
n of
the
20
21
No
Key
base
s an
d as
sum
ptio
ns
Des
crip
tions
sa
id in
dex
is an
app
ropr
iate
est
imat
e of
the
exp
ecte
d m
arke
t ra
te o
f ret
urn
as it
no
rmal
ises
the
year
-on-
year
fluc
tuat
ions
of t
he s
tock
mar
ket a
nd m
itiga
tes
mar
ket
bias
. Ba
sed
on t
he in
form
atio
n so
urce
d fro
m B
loom
berg
, we
have
der
ived
an
aver
age
expe
cted
mar
ket r
ate
of r
etur
n in
Mal
aysia
of 1
0.59
% p
er a
nnum
for
the
past
10
year
s.
(e
) Be
ta (“
β”)
0.81
31 –
1.2
600
(afte
r tak
ing
into
co
nsid
erat
ion
the
repa
ymen
t of b
ank
borro
wing
s ov
er th
e ye
ars)
Beta
is t
he s
ensit
ivity
of
an a
sset
’s re
turn
s to
the
cha
nges
in m
arke
t re
turn
s. I
t m
easu
res
the
corre
latio
n of
sys
tem
atic
risk
betw
een
the
said
ass
et a
nd t
he
mar
ket.
A be
ta o
f mor
e th
an 1
sig
nifie
s th
at t
he a
sset
is r
iskie
r th
an t
he m
arke
t an
d vic
e ve
rsa.
In
der
ivin
g th
e es
timat
ed b
eta
of W
idad
Bui
lder
s, w
e ha
ve re
lied
on th
e hi
stor
ical
5-ye
ar b
eta
up t
o th
e No
tice
LTD
of c
ompa
nies
list
ed o
n Bu
rsa
Secu
ritie
s, w
ith
mar
ket
capi
talis
atio
n of
bet
wee
n RM
200
milli
on a
nd R
M60
0 m
illion
as
wel
l as
w
hose
cor
e bu
sines
s in
volve
s IF
M a
nd/o
r co
nstru
ctio
n bu
sines
ses(1
) and
an
appr
opria
te w
eigh
tage
is
give
n ba
sed
on t
he g
ross
pro
fit c
ontri
butio
n of
the
re
spec
tive
busin
ess
segm
ents
to
the
Wid
ad B
uild
ers
Grou
p. I
n th
is re
spec
t, th
e w
eigh
tage
ass
igne
d to
the
con
stru
ctio
n an
d IF
M s
egm
ents
are
43%
and
57%
re
spec
tivel
y.
As th
e hi
stor
ical b
eta
extra
cted
from
Blo
ombe
rg is
bas
ed o
n th
e ca
pita
l stru
ctur
e of
the
res
pect
ive
com
para
ble
com
pani
es,
we
have
un-
leve
red
the
hist
orica
l bet
a an
d re
-leve
red
it ba
sed
on t
he e
xpec
ted
capi
tal s
truct
ure
of t
he W
idad
Bui
lder
s Gr
oup.
Bas
ed o
n ou
r co
mpu
tatio
n, t
he r
e-le
vere
d be
ta o
f W
idad
Bui
lder
s ra
nges
fro
m 0
.813
1 to
1.2
600
(afte
r ta
king
into
con
sider
atio
n th
e re
paym
ent
of b
ank
borro
wing
s ov
er th
e ye
ars)
. No
te:
(1)
Ther
e is
no c
ompa
ny l
isted
on
Burs
a Se
curit
ies
that
may
be
cons
ider
ed
iden
tical
to
th
e W
idad
Bu
ilder
s Gr
oup
in
term
s of
, am
ongs
t ot
hers
, co
mpo
sitio
n of
bus
ines
s ac
tiviti
es, s
cale
and
size
of o
pera
tions
, risk
pro
file,
tra
ck re
cord
and
pro
spec
ts. N
onet
hele
ss, w
e vie
w th
at th
ese
com
pani
es a
re
adeq
uate
ly co
mpa
rabl
e to
the
Wid
ad B
uild
ers
Grou
p an
d ar
e re
ason
able
to
be a
dopt
ed a
s pr
oxie
s fo
r th
e pu
rpos
es o
f de
rivin
g th
e es
timat
ed b
eta
of
the
IFM
and
con
stru
ctio
n in
dust
ries
in M
alay
sia. T
he c
ompa
rabl
e co
mpa
nies
21
22
No
Key
base
s an
d as
sum
ptio
ns
Des
crip
tions
(exc
ludi
ng o
utlie
rs) i
dent
ified
are
as
follo
ws:
Co
nstru
ctio
n se
gmen
t (i)
Pi
ntar
as J
aya
Berh
ad;
(ii)
Mud
ajay
a Gr
oup
Berh
ad;
(iii)
Peso
na M
etro
Hol
ding
s Be
rhad
; (iv
) TR
C Sy
nerg
y Be
rhad
; (v
) Pu
ncak
Nia
ga H
oldi
ngs
Berh
ad;
(vi)
Faja
rbar
u Bu
ilder
Gro
up B
hd; a
nd
IFM
seg
men
t (v
ii)
AWC
Berh
ad.
(f)
Pe
rpet
uity
gro
wth
ra
te
3.00
% to
3.5
0%
For
the
perio
d be
yond
the
FYE
31
Dece
mbe
r 20
22, w
e ha
ve a
dopt
ed a
ran
ge o
f pe
rpet
uity
gro
wth
rat
e of
3.0
0% t
o 3.
50%
on
the
Wid
ad B
uild
ers
Grou
p’s
FCFE
, w
hich
we
view
as
appr
opria
te a
fter t
akin
g in
to c
onsid
erat
ion,
am
ongs
t oth
ers,
the
grow
th p
rosp
ects
of
the
Wid
ad B
uild
ers
Grou
p an
d th
e IF
M a
nd c
onst
ruct
ion
indu
strie
s in
Mal
aysia
(fu
rther
det
ails
are
set
out
in S
ectio
ns 1
3.2
and
13.3
of
Appe
ndix
I of t
his
IAC)
as
wel
l as
the
infla
tion
in M
alay
sia.
In a
dopt
ing
the
perp
etui
ty g
row
th r
ate
on t
he W
idad
Bui
lder
s Gr
oup’
s FC
FE, w
e ha
ve a
lso c
onsid
ered
the
ove
rvie
w a
nd p
rosp
ects
of
the
cons
truct
ion
and
IFM
in
dust
ries
as d
isclo
sed
in S
ectio
n 13
.2.1
and
13.
2.2
in A
ppen
dix
I of
thi
s IA
C. I
n th
is re
spec
t, w
e no
ted
that
the
gro
wth
in
the
IFM
ind
ustry
cor
rela
tes
to t
he
expa
nsio
n in
the
cons
truct
ion
indu
stry
. As
a c
ross
-che
ck, t
he ra
nge
of p
erpe
tuity
gro
wth
rate
s ad
opte
d is
also
in li
ne w
ith
the
infla
tion
in M
alay
sia w
hich
is p
roje
cted
to
rang
e be
twee
n 3.
00%
and
4.0
0%
for
2017
(fu
rther
det
ails
are
set o
ut in
Sec
tion
13.1
of A
ppen
dix
I of
this
IAC)
. In
ad
optin
g th
ese
rate
s fo
r the
long
term
, we
have
con
sider
ed th
at c
onst
ruct
ion
is a
cost
-bas
ed b
usin
ess,
whi
ch p
rices
wou
ld b
e di
rect
ly af
fect
ed b
y in
flatio
n.
Addi
tiona
lly, w
e ha
ve a
naly
sed
the
hist
orica
l inf
latio
n ra
tes
in M
alay
sia fr
om 2
003
to 2
017.
We
note
d th
at t
he h
istor
ical
infla
tion
rate
s re
flect
ed a
max
imum
of
5.00
%, a
min
imum
of 1
.00%
and
an
aver
age
of 3
.00%
. In
this
resp
ect,
the
rang
e
22
23
No
Key
base
s an
d as
sum
ptio
ns
Des
crip
tions
of
per
petu
ity g
row
th ra
tes
adop
ted
are
with
in th
e ra
nge
of h
istor
ical i
nfla
tion
rate
s in
Mal
aysia
, and
are
clo
se to
the
aver
age
hist
orica
l int
eres
t rat
e of
3.0
0%.
Ther
efro
m,
we
deriv
ed t
he W
idad
Bui
lder
s Gr
oup’
s te
rmin
al v
alue
(in
pre
sent
te
rms)
of b
etw
een
RM52
2.6
milli
on a
nd R
M57
0.1
milli
on.
(g
) St
atut
ory
corp
orat
e in
com
e ta
x ra
te
24%
Th
e la
test
sta
tuto
ry c
orpo
rate
inco
me
tax
rate
app
licab
le t
o th
e W
idad
Bui
lder
s Gr
oup
is 24
%.
The
form
ula
used
to d
eriv
e th
e fa
ir va
lue
of W
idad
Bui
lder
s Gr
oup’
s bu
sines
ses
is as
follo
ws:
- Fa
ir va
lue
of th
e W
idad
Bui
lder
s Gr
oup’
s bu
sines
s at
tribu
tabl
e to
sha
reho
lder
s =
Pr
esen
t val
ue o
f pro
ject
ed F
CFE
base
d on
the
Futu
re F
inan
cials(1
) +
Pr
esen
t val
ue o
f ter
min
al v
alue
(1)
Note
:- (1
)
C
ompu
ted
base
d on
the
follo
win
g fo
rmul
a:-
Pres
ent v
alue
of F
CFE
or te
rmin
al v
alue
=
FC
FE o
r ter
min
al v
alue
(1
+ K
e)n
whe
reby
, n re
pres
ents
tim
e, in
yea
rs in
to th
e fu
ture
.
Base
d on
the
abov
e, th
e fa
ir va
lue
of th
e W
idad
Bui
lder
s Gr
oup’
s bu
sines
ses
rang
es fr
om a
ppro
ximat
ely
RM61
5.7
milli
on to
RM
663.
2 m
illion
.
Lo
wer
rang
e of
val
uatio
n H
ighe
r ran
ge
of v
alua
tion
RM
’mill
ion
RM’m
illio
n
Pres
ent v
alue
of F
CFE
93.1
93
.1
Pres
ent v
alue
of t
erm
inal
val
ue
522.
6 57
0.1
Fair
valu
e of
Wid
ad B
uild
ers
Gro
up
615.
7 66
3.2
23
24
6.1.2 Surplus assets
The material surplus assets of the New IJ Group are: (a) net surplus cash to be received from the Proposals; and (b) non-trade balances owing by the Directors and related companies of Widad Builders
Group which shall be repaid prior to the completion of the Acquisition. RM’million Funds from Placement(1) 122.7 Funds from Disposal 28.0 150.7 Cash portion of Acquisition Consideration (110.0) Expenses relating to the Proposals (3.7) Surplus cash from the Proposals 37.0 Settlement of amount due from related companies 47.6 Settlement of amount due from Directors 3.4 Surplus assets from non-core business activities 88.0
Note: (1) Assuming that 533,265,423 IJ Shares will be issued at a minimum issue price of
RM0.23 each, as disclosed in the circular to shareholders of Ideal Jacobs dated 4 January 2018.
6.1.3 Fair value of Ideal Jacobs
Based on the SOPV valuation method, the fair value per IJ Share is calculated as follows:
Lower range of valuation
Higher range of valuation
RM’million RM’million Fair value of Widad Builders Group 615.7 663.2 Add: Surplus assets 88.0 88.0 Fair value of Ideal Jacobs 703.6 751.2 No. of issued IJ Shares after the Acquisition and Placement (million) (1)2,453 (1)2,453 Fair value per IJ Share (RM) 0.2868 0.3060 Note: (1) Assuming that none of the outstanding ESOS Options are exercised. Comments: Based on the fair value per IJ Share, the Offer Price of RM0.23 represents a discount of RM0.06 to RM0.08 or 19.80% to 24.84% over the estimated fair value per IJ Share of RM0.2868 to RM0.3060. Notwithstanding the above, we wish to highlight that our evaluation is strictly premised on the assumption that the Acquisition, Placement and Disposal will be completed. In the event that the Acquisition, Placement and/or Disposal are not completed, the valuation of the IJ Shares will be significantly impacted. As at the LPD, the
24
25
management of Ideal Jacobs and M&A Securities are not aware of any factors and/or circumstances which may substantially affect the timeline for completion of the Acquisition, Placement and Disposal.
Holders should also take note that the Acquisition and Disposal are not conditional upon the Placement. Hence, should the Placement fail to be completed, it is assumed that the cash consideration of the Acquisition of RM110.0 million will be funded by other means, and the surplus assets of Ideal Jacobs will be as follows: RM’million Funds raised by other means for the Acquisition 110.0 Funds from Disposal 28.0 140.0 Cash portion of Acquisition Consideration (110.0) Expenses relating to the Proposals (3.7) Surplus cash from the Proposals 24.3 Settlement of amount due from related companies 47.6 Settlement of amount due from Directors 3.4 Surplus assets from non-core business activities 75.2 As a result, the fair value of Ideal Jacobs will be affected in the following manner:
Lower range of valuation
Higher range of valuation
RM’million RM’million Fair value of Widad Builders Group 615.7 663.2 Add: Surplus assets 75.2 75.2 Fair value of Ideal Jacobs 690.9 738.4 No. of issued IJ Shares after the Acquisition (million) (1)1,919 (1)1,919 Fair value per IJ Share (RM) 0.3599 0.3848 Note: (1) Assuming that none of the outstanding ESOS Options are exercised.
The rest of this page is intentionally left blank
25
26
6.2 Historical market price performance of IJ Shares
In considering the Offer, Holders should take into consideration the movement of the market prices and trading volumes of IJ Shares as traded on Bursa Securities. The graph below sets out the historical closing market prices and volume of the IJ Shares as extracted from Bloomberg for the past 12 months before the commencement of the Offer Period and up to the LPD.
RM
We note that the closing price of IJ Shares prior to the Notice has been consistently above the Offer Price of RM0.23. Further, save for the following announcements in relation to the Proposals, we do not note any significant events surrounding the IJ Group for the past 12 months before the commencement of the Offer Period and up to the LPD which may have impacted the trading market prices of IJ Shares during the said period other than below:
Date Significant event 5 June 2017 Announcement of the HOA
18 August 2017 Announcement of the Proposals
13 December 2017 Approval of the Proposals by Bursa Securities
29 January 2018 Approval of the Proposals by shareholders at its extraordinary
general meeting
RM0.23
Volume
26
27
The comparison of the Offer Price against the historical market prices of IJ Shares is as follows:
Market Price Discount (RM) (RM) (%)
Up to the Acquisition LTD Last traded market price 0.47 0.24 51.06 5 day VWAMP 0.46 0.23 50.00 1 month VWAMP 0.49 0.26 53.06 3 month VWAMP 0.44 0.21 47.73 6 month VWAMP 0.40 0.17 42.50 1 year VWAMP 0.37 0.14 37.84 Up to the Notice LTD Last traded market price 0.33 0.10 30.30 5 day VWAMP 0.33 0.10 30.30 1 month VWAMP 0.39 0.16 41.03 3 month VWAMP 0.40 0.17 42.50 6 month VWAMP 0.41 0.18 43.90 1 year VWAMP 0.40 0.17 42.50 Up to the LPD Last traded market price 0.30 0.07 23.33 5 day VWAMP 0.31 0.08 25.81
(Source: Bloomberg) Comments: We noted that the Offer Price represents: (a) a discount of between 37.84% to 53.06% (or between RM0.14 to RM0.26) over the 5
day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares up to the Acquisition LTD;
(b) a discount of between 30.30% to 43.90% (or between RM0.10 to RM0.18) over the 5
day, 1 month, 3 month, 6 month and 1 year VWAMP of IJ Shares up to the Notice LTD; and
(c) a discount of 23.33% and 25.81% (or RM0.07 and RM0.08) to the last traded price of
IJ Shares as at the LPD and 5 day VWAMP of IJ Shares up to and including the LPD respectively.
It should be noted that the historical market prices of the IJ Shares had been trading higher than the Offer Price since the announcement of the HOA. However, this may not be an indication of future market price performance of the IJ Shares which may be influenced by, amongst others, the performance and prospects of New IJ Group (which will be assuming the entire business operations of the Widad Business Group upon completion of the Acquisition and Disposal), prevailing economic outlook and conditions, stock market conditions, market sentiments and other general macroeconomic conditions as well as company-specific factors. There can be no assurance that the market price of IJ Shares will continue to trade at the current price levels after the Closing Date.
27
28
6.3 Our view on the fairness of the Offer Premised on our evaluation in Sections 6.1 and 6.2 of Part B of this IAC, as the Offer Price of RM0.23 is: (a) at a discount of RM0.06 to RM0.08 or 19.80% to 24.84% over the estimated fair
value per IJ Share of RM0.2868 to RM0.3060 derived from the SOPV method of valuation in Section 6.1 of Part B of this IAC; and
(b) represents a discount of between RM0.07 to RM0.26 or 23.33% to 53.06% to the
historical market price of IJ Shares as set out in Section 6.2 of Part B of this IAC, we are of the view that the Offer is NOT FAIR. Notwithstanding the above, we wish to highlight that our evaluation is strictly premised on the assumption that the Acquisition, Placement and Disposal will be completed. As at the LPD, the management of Ideal Jacobs and M&A Securities are not aware of any factors and/or circumstances which may substantially affect the timeline for completion of the Acquisition, Placement and Disposal. Nevertheless, the Holders are advised to read the ensuing sections of this IAC for a comprehensive evaluation of the Offer and not to rely solely on the above evaluation of the IJ Shares as the sole criteria when assessing the Offer.
7. REASONABLENESS EVALUATION OF THE OFFER 7.1 Listing status
Please refer to Section 4 of the Offer Document for the intention of the Offeror in respect of the listing status of Ideal Jacobs. We noted that the Offeror intends to maintain the listing status of Ideal Jacobs on the ACE Market of Bursa Securities. Accordingly, in the event that Ideal Jacobs does not comply with the Public Spread Requirement, the Offeror will, together with Ideal Jacobs, explore various options or proposals within 3 months from the Closing Date, or such extended timeframe as the relevant authorities may allow, to facilitate Ideal Jacobs’s compliance with the Public Spread Requirement. As part of the Proposals, the Ideal Jacobs proposes to issue and allot up to 534,032,115 new IJ Shares to third party placees to be identified and the Offeror proposes to place out its Consideration Shares to comply with the Public Spread Requirement. Holders should note that if they choose not to accept the Offer, they will continue to hold IJ Shares that is likely to remain listed on Bursa Malaysia. Holders should note that while the Offeror propose to undertake the Placement to rectify any shortfall in the Public Spread Requirement, there can be no assurance that the Public Spread Requirement can be rectified within the stipulate time frame. In the event that Ideal Jacobs does not meet the Public Spread Requirement within the stipulated timeframe or any extension of time granted by Bursa Securities, Ideal Jacobs may be removed from the Official List and the securities of Ideal Jacobs may become illiquid securities as they will not be traded on Bursa Securities. In addition, there may not be an active or ready market for the unlisted securities of Ideal Jacobs. Even if the Public Spread Requirement is met upon completion of the Proposals, there is no assurance that there will be an active and liquid market for IJ Shares thereafter. You are
28
29
advised to closely monitor any press releases and/or announcements made in relation to the non-compliance with the Public Spread Requirement (if any), level of acceptances and the outcome of the Offer as well as the progress of the Proposals.
7.2 Compulsory acquisition and rights of dissenting shareholders Please refer to Section 4 of the Offer Document for the intention of the Offeror to invoke compulsory acquisition and the rights of Dissenting Holders. We noted if the Offeror receives acceptances of not less than 9/10 in the value of the Offer Shares (excluding IJ Shares already held by the Offeror and its persons acting in concert at the date of the Offer), the Offeror does not intend to invoke the provisions of Section 222(1) of the CMSA to compulsorily acquire any remaining Offer Shares for which acceptances have not been received. Notwithstanding the above, in the event that the Offeror receives valid acceptances from the Accepting Holders resulting in the Offeror and persons acting in concert with the Offeror holding not less than 9/10 in the value of the existing issued share capital of Ideal Jacobs (including the IJ Shares already held by the Offeror and its person acting in concert) on or before the Closing Date (“Section 223 Threshold”), a Dissenting Holder may exercise his rights under Section 223(1) of the CMSA within a period to be specified by the Offeror which shall be no less than 3 months after the Closing Date, by serving a notice on the Offeror to require the Offeror to acquire his IJ Shares on the same terms as set out in the Offer Document or such other terms as may be agreed between the Offeror and such Dissenting Holder. Should a Dissenting Holder exercise his rights under the provisions of Section 223(1) of the CMSA, the Offeror shall acquire such Offer Shares held by the said Dissenting Holder in accordance with the provisions of the CMSA, subject to Section 224 of the CMSA. In accordance with Section 224(3) of the CMSA, when a Dissenting Holder exercises his rights under Section 223(1) of the CMSA, the court may, on an application made by such Dissenting Holder or by the Offeror, order the terms on which the Offeror shall acquire such Offer Shares shall be as the court deems fit. In accordance with Section 223(2) of the CMSA, Dissenting Holders shall be notified by the Offeror via a notice in the manner prescribed under the Rules (within 1 month from the fulfilment of the Section 223 Threshold) of the rights exercisable by them under Section 223(1) of the CMSA. We wish to advise that if Dissenting Holders have become entitled to and wish to exercise their rights under Section 223 of the CMSA, Dissenting Holders should consult their legal adviser immediately.
7.3 Free Warrants Issue We noted that as part of the Proposals, Ideal Jacobs will implement the Free Warrants Issue, which entails an issuance of free Warrants on the basis of 1 Warrant for every 5 existing IJ Shares held after completion of the Acquisition, Disposal and Placement at an entitlement date to be determined later. This will allow shareholders to further participate in the New IJ Group’s future growth and be rewarded for any potential upside in this respect. The value of this potential upside will depend on, amongst others, the exercise price of the Warrants, which is to be fixed at a later date, and the market price of IJ Shares. As such, Holders have an additional incentive to remain as shareholders of Ideal Jacobs. Conversely, Holders should also take note that if the exercise price of the Warrants are fixed out-of-the-money, then the value and potential upside of these Warrants would be significantly limited.
29
30
7.4 Our view on the reasonableness of the Offer Based on our evaluation in Sections 7.1, 7.2 and 7.3 of Part B of this IAC, we noted that: (a) the Offeror intends to maintain the listing status of Ideal Jacobs on the ACE Market of
Bursa Securities, thereby allowing the Holders to sell their IJ Shares in the open market after the Closing Date;
(b) the Offeror does not intend to invoke the provisions of Section 222(1) of the CMSA to
compulsorily acquire any outstanding Offer Shares for which valid acceptances have not been received prior to the Closing Date; and
(c) Holders who choose to reject the Offer will receive free Warrants which will allow
them to participate in the potential upside of Ideal Jacobs moving forward. Premised on the above, we view the Offer as NOT REASONABLE.
8. RATIONALE FOR THE OFFER AND FUTURE PLANS FOR IDEAL JACOBS AND ITS
EMPLOYEES We refer to the rationale for the Offer and future plans for IJ Group and their employees as set out in Sections 3 and 5 of the Offer Document respectively.
8.1 Rationale for the Offer The rationale for the Offer is a mandatory obligation pursuant to the Rules as the Acquisition SPA has become unconditional. The collective shareholdings of the Offeror and Joint Ultimate Offeror in Ideal Jacobs will increase from 0.53% to approximately 92.91% following the Acquisition. Through the Offeror’s controlling interest in Ideal Jacobs, the Joint Ultimate Offerors will have the ability to determine Ideal Jacobs’ strategic direction and flexibility to effect the necessary changes in view of its new core businesses. The Offeror will endeavour to grow Ideal Jacobs’ businesses by, among others, exploring synergies with the WBGSB group of companies.
Comments: The Offer is a mandatory take-over offer made in compliance with Section 218(2) of the CMSA and Subparagraph 4.01(a) of the Rules as a result of the Acquisition SPA becoming unconditional on 12 February 2018. We noted that the Offeror will gain statutory control in Ideal Jacobs after the Acquisition and therefore will gain flexibility in respect of the management of Ideal Jacobs’ business and operations. The Offeror will also be in a position to pass all ordinary resolutions of Ideal Jacobs where the Offeror and persons connected to it are not required to abstain from voting. We also note that there will be changes in the key management of Ideal Jacobs, amongst others, with the appointment of: (a) Tan Sri Ikmal, the Group Executive Chairman of WBGSB group of companies, as the
Executive Director of Ideal Jacobs; and (b) Dato’ Rizal, the Group Chief Executive Officer of WBGSB group of companies, as the
Executive Director of Ideal Jacobs. As such, this is expected to augur well for the business and financial performance of the IJ Group.
30
31
8.2 Future plans for IJ Group and its employees In evaluating the Offer, we have considered the intention of the Offeror as set out in Section 5 of the Offer Document as follows: (a) the Offeror does not intend to continue with the existing manufacturing, fabrication
and trading businesses of IJ Group. The New IJ Group will instead be principally involved in construction and IFM activities. Nevertheless, the Offeror may review the New IJ Group’s businesses and operations from time to time and make any arrangements, rationalisation and reorganisation of the New IJ Group that the Offeror considers suitable, including exploring synergistic opportunities with the WBGSB group of companies, to facilitate the future growth of the New IJ Group’s businesses and operations;
(b) the Offeror does not have plans to introduce any other major change in the New IJ
Group’s businesses, liquidate any of the companies within the New IJ Group, dispose of any other major assets or undertake any major redeployment of fixed assets of the New IJ Group beyond the changes to the existing IJ Group mentioned above, which are consequential to the Acquisition and Disposal. Nevertheless, the Offeror may from time to time review strategic options with regard to the New IJ Group’s future business and operations and implement changes with a view to ensuring that the New IJ Group remains competitive or to improve its prospects and future growth.
As at the Offer Document LPD, except for the Acquisition and Disposal, the Offeror has no other knowledge of and has not entered into any negotiation, arrangement or understanding with any 3rd party that will cause any significant change in the New IJ Group’s businesses, assets or shareholding structure; and
(c) the Offeror has no plans to dismiss or make redundant any of the existing IJ Group’s
employees as a direct consequence of the Offer. Upon the completion of the Disposal, IJ Group’s current employees will continue to be employed under the Disposal Subsidiaries, which will not be part of the New IJ Group. In line with the above, employees of Widad Builders Group will become employees under the New IJ Group. The Offeror may propose constructive measures from time to time to enhance the New IJ Group’s operational efficiency and optimise its staff productivity, subject to IJ Board’s decisions made in the best interest of the New IJ Group.
Comments:
We noted that as at the Offer Document LPD, except for the Acquisition and Disposal, the Offeror has no knowledge of and has not entered into any negotiation or arrangement or understanding whatsoever with any 3rd party with regard to any significant change in the existing businesses, assets or shareholding structure of the IJ Group. We understand that the Disposal is being undertaken as part of the Proposals to realign the core business of Ideal Jacobs. Following the completion of the Proposals, the New IJ Group will be principally involved in construction and IFM activities. Additionally, we noted that the management of Widad Builders and Ideal Jacobs take a favourable view of the prospects of the New IJ Group. This is after having considered, amongst others, the continued growth expected for the construction and IFM industries, as well as the track record and performance of Widad Builders. Premised on the foregoing, we share the favourable view of the management of Widad Builders and Ideal Jacobs on the prospects of the New IJ Group moving forward. For further details on the overview and prospects of the construction and IFM industry as well as the New IJ Group, please refer to Section 13 in Appendix I of this IAC.
31
32
Premised on the above, the financial performance, financial position and business prospects of the New IJ Group are expected to remain intact and continue as a going concern. Separately, we wish to highlight that, the employees of the current IJ Group would no longer be able to participate in Ideal Jacobs’ employee share option scheme after the completion of the Disposal as they would no longer be employees of the New IJ Group.
9. FURTHER INFORMATION We advise the Holders to refer to the enclosed appendices for further information on Ideal Jacobs and other information.
10. CONCLUSION AND RECOMMENDATION
We have assessed and evaluated the Offer and have set out our evaluation in Section 5 of the IAL. The Holders should take into careful consideration the merits and demerits of the Offer based on all relevant and pertinent factors including those set out below and other considerations as set out in the IAL and the Offer Document. In arriving at our opinion, we have assessed the fairness and reasonableness of the Offer in accordance with Paragraphs 1 to 6 under Schedule 2: Part III of the Rules, where the term “fair and reasonable” should generally be analysed as 2 distinct criteria, i.e. whether the offer is “fair” and whether the offer is “reasonable”, rather than as composite term. In this respect, we have taken into consideration various applicable factors as set out below.
10.1 Fairness We view the Offer as NOT FAIR in view that: (a) the Offer Price of RM0.23 represents a discount of RM0.06 to RM0.08 or 19.80% to
24.84% over the estimated fair value per IJ Share derived using the SOPV method of RM0.2868 to RM0.3060. This is strictly premised on the assumption that the Acquisition, Placement and Disposal will be completed. As at the LPD, the management of Ideal Jacobs and M&A Securities are not aware of any factors and/or circumstances which may substantially affect the timeline for completion of the Acquisition, Placement and Disposal; and
(b) the Offer Price is lower than the closing market prices of the IJ Shares by between
RM0.07 to RM0.26 or 23.33% to 53.06% since the announcement of the Proposals up to the LPD.
10.2 Reasonableness
We view the Offer as NOT REASONABLE in view that: (a) the Offeror intends to maintain the listing status of Ideal Jacobs on the ACE Market of
Bursa Securities, thereby allowing the Holders to sell their IJ Shares in the open market after the Closing Date;
(b) the Offeror does not intend to invoke the provisions of Section 222(1) of the CMSA to
compulsorily acquire any outstanding Offer Shares for which valid acceptances have not been received prior to the Closing Date; and
(c) Holders who choose to reject the Offer will receive free Warrants which will allow
them to participate in the potential upside of Ideal Jacobs moving forward.
32
33
10.3 Recommendation
Premised on the above, M&A Securities views the Offer to be NOT FAIR and NOT REASONABLE.
Accordingly, we recommend that the Holders REJECT the Offer. However, Holders who wish to immediately realise their investment in Ideal Jacobs may consider disposing the IJ Shares in the open market during the Offer Period if the market price of IJ Shares remains higher than the Offer Price, taking into consideration the transaction costs associated with such disposal in the open market. The advice of M&A Securities as contained in this IAC is addressed to the Holders at large and not to any particular Holder. Accordingly, in providing this advice, we have not taken into consideration any specific investment objectives, financial situation, risk profile and particular needs of any individual Holder or any specific group of Holders. We recommend that any individual Holder or any specific group of Holders who may require advice in the context of their objectives, financial situation and particular needs should consult their respective stockbroker, solicitor, accountant, banker or other professional advisers immediately.
Yours faithfully For and on behalf of M&A SECURITIES SDN BHD GARY TING DANNY WONG Head Deputy Head Corporate Finance Corporate Finance
33
APPENDIX I – INFORMATION ON IDEAL JACOBS
35
1. HISTORY AND BUSINESS Ideal Jacobs was incorporated in Malaysia under the Companies Act, 1965 as a private limited company on 18 May 2009. On 6 April 2010, it was converted into a public company limited by shares. Ideal Jacobs was listed on the ACE Market of Bursa Securities on 18 May 2011. Ideal Jacobs is an investment holding company. Through its existing subsidiaries, Ideal Jacobs is presently involved in the manufacture of industrial labels (including nameplates and overlays) and laser/die-cut products; the fabrication of plastic parts and trading of other non-core products. Further information on Ideal Jacobs’ subsidiaries is set out in Section 5 of this Appendix I.
2. SHARE CAPITAL
2.1 Issued share capital
The issued share capital of Ideal Jacobs as at the LPD is RM21,189,342 comprising 136,851,075 IJ Shares. There is only 1 class of IJ Shares in Ideal Jacobs which rank equally in terms of voting rights and entitlements to any dividends, rights, allotments and/or distributions (including any capital distributions (which may be declared, made or paid to shareholders.
2.2 Changes in issued share capital Since the end of FYE 31 December 2017 up to the LPD, there are no changes in Ideal Jacobs’s issued share capital.
2.3 Convertibles As at the LPD, save for 1,150,075 ESOS Options, Ideal Jacobs does not have any other convertible securities.
3. SUBSTANTIAL SHAREHOLDERS The substantial shareholders of Ideal Jacobs who hold 5% or more of the issued share capital in Ideal Jacobs and their shareholdings in Ideal Jacobs, based on the announcements on Bursa Securities as at the LPD are as follows:
Direct Indirect
Name No. of IJ Shares % No. of IJ Shares % Ideal Jacobs Corporation 36,454,600 26.64 - - Andrew Conrad Jacobs 1,289,900 0.94 (1)36,619,600 26.76 Foo Chong Lee 17,436,400 12.74 - - Dato’ Meng Bin 1,150,000 0.84 (2)17,436,400 12.74
Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in Ideal
Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act. (2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse,
Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
35
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
36
4. DIRECTORS AND THEIR SHAREHOLDINGS
The details of the Directors of Ideal Jacobs and their respective shareholdings in Ideal Jacobs as at the LPD are as follows:
Direct Indirect Name and
designation Address Nationality No. of IJ
Shares % No. of IJ
Shares % Andrew Conrad Jacobs
(Executive Chairman) 22 Hickory Rd. Short Hills, NJ 07078 United States of
America
American 1,289,900 0.94 (1)36,619,600 26.76
Dato’ Meng Bin
(Chief Executive Officer / Managing Director)
5D-304, Emerald Hill Condominium
Jalan Bukit Belacan 68000 Ampang Selangor Darul Ehsan
Chinese 1,150,000 0.84 (2)17,436,400 12.74
Hing Kim Tat (Independent Non- Executive Director)
No. 20, Jalan USJ 1/3K Grandville
47600 Subang Jaya Selangor Darul Ehsan
Malaysian
- - - - Koong Lin Loong
(Independent Non- Executive Director)
No. 18, Jalan BU 12/4, Bandar Utama Damansara
47800 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Tan Kean Huat
(Independent Non- Executive Director)
No.3, Jalan Pekaka 8/15 Section 8 Kota
Damansara 47810 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Rizvi Bin Abd Halim
(Independent Non- Executive Director)
No. 2, Jalan Cecawi 6/31B
Kota Damansara 47810 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in Ideal
Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act. (2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse,
Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
36
4. DIRECTORS AND THEIR SHAREHOLDINGS
The details of the Directors of Ideal Jacobs and their respective shareholdings in Ideal Jacobs as at the LPD are as follows:
Direct Indirect Name and
designation Address Nationality No. of IJ
Shares % No. of IJ
Shares % Andrew Conrad Jacobs
(Executive Chairman) 22 Hickory Rd. Short Hills, NJ 07078 United States of
America
American 1,289,900 0.94 (1)36,619,600 26.76
Dato’ Meng Bin
(Chief Executive Officer / Managing Director)
5D-304, Emerald Hill Condominium
Jalan Bukit Belacan 68000 Ampang Selangor Darul Ehsan
Chinese 1,150,000 0.84 (2)17,436,400 12.74
Hing Kim Tat (Independent Non- Executive Director)
No. 20, Jalan USJ 1/3K Grandville
47600 Subang Jaya Selangor Darul Ehsan
Malaysian
- - - - Koong Lin Loong
(Independent Non- Executive Director)
No. 18, Jalan BU 12/4, Bandar Utama Damansara
47800 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Tan Kean Huat
(Independent Non- Executive Director)
No.3, Jalan Pekaka 8/15 Section 8 Kota
Damansara 47810 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Rizvi Bin Abd Halim
(Independent Non- Executive Director)
No. 2, Jalan Cecawi 6/31B
Kota Damansara 47810 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in Ideal
Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act. (2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse,
Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
36
4. DIRECTORS AND THEIR SHAREHOLDINGS
The details of the Directors of Ideal Jacobs and their respective shareholdings in Ideal Jacobs as at the LPD are as follows:
Direct Indirect Name and
designation Address Nationality No. of IJ
Shares % No. of IJ
Shares % Andrew Conrad Jacobs
(Executive Chairman) 22 Hickory Rd. Short Hills, NJ 07078 United States of
America
American 1,289,900 0.94 (1)36,619,600 26.76
Dato’ Meng Bin
(Chief Executive Officer / Managing Director)
5D-304, Emerald Hill Condominium
Jalan Bukit Belacan 68000 Ampang Selangor Darul Ehsan
Chinese 1,150,000 0.84 (2)17,436,400 12.74
Hing Kim Tat (Independent Non- Executive Director)
No. 20, Jalan USJ 1/3K Grandville
47600 Subang Jaya Selangor Darul Ehsan
Malaysian
- - - - Koong Lin Loong
(Independent Non- Executive Director)
No. 18, Jalan BU 12/4, Bandar Utama Damansara
47800 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Tan Kean Huat
(Independent Non- Executive Director)
No.3, Jalan Pekaka 8/15 Section 8 Kota
Damansara 47810 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Rizvi Bin Abd Halim
(Independent Non- Executive Director)
No. 2, Jalan Cecawi 6/31B
Kota Damansara 47810 Petaling Jaya Selangor Darul Ehsan
Malaysian
- - - - Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in Ideal
Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act. (2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse,
Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
36
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
37
5. SUBSIDIARIES AND ASSOCIATED COMPANIES
The subsidiaries of Ideal Jacobs as at the LPD are as follows:
Name of companies Country of
incorporation
Effective equity
interest (%) Principal activities
Ideal Jacobs (Xiamen)
Corporation PRC 100 Research and development
and manufacturing of components in industrial equipment and designing and manufacturing of industrial labels, nameplates, and laser/die-cut products and fabrication of plastic parts
Ideal Jacobs (HK)
Corporation Limited Hong Kong 100 Trading in general products
Ideal Laminar Pte. Ltd. Singapore 51 In liquidation Held via Ideal Jacobs (Xiamen) Corporation Xiamen Ideal Jacobs
International Limited Company
PRC 100 Trading in general products
Suzhou Ideal Jacobs Corporation
PRC 100 Designing and manufacturing of industrial labels, nameplates, and laser/die-cut products and fabrication of plastic parts
As at the LPD, Ideal Jacobs does not have any associated company.
The rest of this page is intentionally left blank
37
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
38
6. (LOSS)/PROFIT AND DIVIDEND RECORD A summary of the Group’s results based on the audited consolidated financial statements of Ideal Jacobs for the FYE 31 December 2014, 31 December 2015 and 31 December 2016 as well as the latest unaudited consolidated financial statements of Ideal Jacobs for the FYE 31 December 2017 is as follows:-
Audited Unaudited FYE 31 December 2014 2015 2016 2017 RM’000 Revenue 38,537 36,755 42,748 58,521 (Loss)/Profit before tax (4,283) 2,205 2,771 4,812 Taxation (895) (894) (1,424) (1,580) (Loss)/Profit after tax (5,178) 1,311 1,347 3,232
(Loss)/Profit after tax
attributable to: Equity holders of Ideal Jacobs (3,862) (871) 1,595 3,070 Non-controlling interest (1,316) 2,182 (248) 162 (Loss)/Profit after tax (5,178) 1,311 1,347 3,232
Weighted average number of
IJ Shares in issue (‘000) 125,372 134,802 135,701 135,934 (Loss)/Earnings per share
(sen) (3.08) (0.65) 1.18 2.26 Dividends per share - - - - Total equity attributable to
the owners of Ideal Jacobs 22,237 26,408 27,526 30,131 Net asset per share (RM) 0.18 0.19 0.20 0.22
There is no exceptional item in the audited consolidated financial statements of Ideal Jacobs for the 3 financial years up to FYE 31 December 2016 and the latest unaudited consolidated financial statements of Ideal Jacobs for the FYE 31 December 2017.
The rest of this page is intentionally left blank
38
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
39
7. STATEMENT OF ASSETS AND LIABILITIES The statements of assets and liabilities of IJ Group based on the audited consolidated statements of financial position of Ideal Jacobs as at 31 December 2015 and 31 December 2016 and the latest unaudited consolidated statements of financial position of Ideal Jacobs as at 31 December 2017 are as follows: Audited Unaudited As at 31 December 2015 2016 2017 RM’000 ASSETS Non-Current Assets Property, plant and equipment 20,477 20,175 12 Investment property 1,489 1,461 - Prepaid land lease payment 1,752 1,672 - Other investment 109 109 - Total Non-Current Assets 23,827 23,417 12 Current Assets Inventories 3,952 4,744 - Trade receivables 11,519 12,972 - Other receivables 1,629 1,375 50 Amount due from a corporate shareholder 1,059 279 - Fixed deposits with licensed banks 8,307 8,370 - Cash and bank balances 7,303 9,362 248 33,769 37,102 298 Assets classified as held for sale - - 59,188 Total Current Assets 33,769 37,102 59,486 TOTAL ASSETS 57,596 60,519 59,498 EQUITY AND LIABILITIES Current Liabilities Trade payables 4,403 5,380 - Other payables 4,429 5,078 852 Borrowings 13,259 16,336 - Tax payable 571 1,166 - 22,662 27,960 852 Liabilities classified as held for sale - - 28,515 Total Current Liabilities 22,662 27,960 29,367 Non-Current Liabilities Borrowings 8,616 5,168 - Deferred tax liabilities 36 36 - Total Non-Current Liabilities 8,653 5,204 - TOTAL LIABILITIES 31,315 33,164 29,367
39
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
40
Audited Unaudited As at 31 December 2015 2016 2017 RM’000 EQUITY Share capital 13,570 13,570 21,189 Reserves 18,077 18,343 11,166 Accumulated losses (5,239) (4,387) (2,224) Equity attributable to owners of Ideal Jacobs 26,408 27,526 30,131 Non-controlling interests (127) (171) - TOTAL EQUITY 26,281 27,355 30,131 TOTAL EQUITY AND LIABILITIES 57,596 60,519 59,498 As at the LPD, there is no known material change in the financial position of IJ Group subsequent to the latest audited financial statements for the FYE 31 December 2016.
8. ACCOUNTING POLICIES
Based on the audited consolidated financial statements of Ideal Jacobs for FYE 31 December 2015 and 31 December 2016 and unaudited consolidated financial statements FYE 31 December 2017, the financial statements have been prepared based on approved Malaysian accounting standards and there was no audit qualification for Ideal Jacob’s financial statements for the respective years under review. There is no change in the accounting standards adopted by Ideal Jacobs which would result in a material variation to the comparable figures for the audited consolidated financial statements of Ideal Jacobs for FYE 31 December 2015 and 31 December 2016 and unaudited consolidated financial statements FYE 31 December 2017.
In light of the Disposal, the operations of the Disposal Subsidiaries have met the criteria to be classified as assets/liabilities held for sale. The unaudited financial statements of IJ Group for the FYE 31 December 2017 have reflected such discontinuing operations.
9. BORROWINGS
As at 31 December 2017, which is not more than 3 months preceding the LPD, the IJ Group has total outstanding borrowings of approximately RM13.74 million, all of which are interest bearing, as follows: Borrowings Amount (RM’000) Term loans Secured 11,864 Unsecured 1,874 Total Borrowings 13,738
10. CONTINGENT LIABILITIES
As at the LPD, the Board is not aware of any contingent liabilities incurred or known to be incurred by the IJ Group, which may, upon becoming enforceable, have a material impact on the IJ Group’s financial position or business.
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
40
Audited Unaudited As at 31 December 2015 2016 2017 RM’000 EQUITY Share capital 13,570 13,570 21,189 Reserves 18,077 18,343 11,166 Accumulated losses (5,239) (4,387) (2,224) Equity attributable to owners of Ideal Jacobs 26,408 27,526 30,131 Non-controlling interests (127) (171) - TOTAL EQUITY 26,281 27,355 30,131 TOTAL EQUITY AND LIABILITIES 57,596 60,519 59,498 As at the LPD, there is no known material change in the financial position of IJ Group subsequent to the latest audited financial statements for the FYE 31 December 2016.
8. ACCOUNTING POLICIES
Based on the audited consolidated financial statements of Ideal Jacobs for FYE 31 December 2015 and 31 December 2016 and unaudited consolidated financial statements FYE 31 December 2017, the financial statements have been prepared based on approved Malaysian accounting standards and there was no audit qualification for Ideal Jacob’s financial statements for the respective years under review. There is no change in the accounting standards adopted by Ideal Jacobs which would result in a material variation to the comparable figures for the audited consolidated financial statements of Ideal Jacobs for FYE 31 December 2015 and 31 December 2016 and unaudited consolidated financial statements FYE 31 December 2017.
In light of the Disposal, the operations of the Disposal Subsidiaries have met the criteria to be classified as assets/liabilities held for sale. The unaudited financial statements of IJ Group for the FYE 31 December 2017 have reflected such discontinuing operations.
9. BORROWINGS
As at 31 December 2017, which is not more than 3 months preceding the LPD, the IJ Group has total outstanding borrowings of approximately RM13.74 million, all of which are interest bearing, as follows: Borrowings Amount (RM’000) Term loans Secured 11,864 Unsecured 1,874 Total Borrowings 13,738
10. CONTINGENT LIABILITIES
As at the LPD, the Board is not aware of any contingent liabilities incurred or known to be incurred by the IJ Group, which may, upon becoming enforceable, have a material impact on the IJ Group’s financial position or business.
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
40
Audited Unaudited As at 31 December 2015 2016 2017 RM’000 EQUITY Share capital 13,570 13,570 21,189 Reserves 18,077 18,343 11,166 Accumulated losses (5,239) (4,387) (2,224) Equity attributable to owners of Ideal Jacobs 26,408 27,526 30,131 Non-controlling interests (127) (171) - TOTAL EQUITY 26,281 27,355 30,131 TOTAL EQUITY AND LIABILITIES 57,596 60,519 59,498 As at the LPD, there is no known material change in the financial position of IJ Group subsequent to the latest audited financial statements for the FYE 31 December 2016.
8. ACCOUNTING POLICIES
Based on the audited consolidated financial statements of Ideal Jacobs for FYE 31 December 2015 and 31 December 2016 and unaudited consolidated financial statements FYE 31 December 2017, the financial statements have been prepared based on approved Malaysian accounting standards and there was no audit qualification for Ideal Jacob’s financial statements for the respective years under review. There is no change in the accounting standards adopted by Ideal Jacobs which would result in a material variation to the comparable figures for the audited consolidated financial statements of Ideal Jacobs for FYE 31 December 2015 and 31 December 2016 and unaudited consolidated financial statements FYE 31 December 2017.
In light of the Disposal, the operations of the Disposal Subsidiaries have met the criteria to be classified as assets/liabilities held for sale. The unaudited financial statements of IJ Group for the FYE 31 December 2017 have reflected such discontinuing operations.
9. BORROWINGS
As at 31 December 2017, which is not more than 3 months preceding the LPD, the IJ Group has total outstanding borrowings of approximately RM13.74 million, all of which are interest bearing, as follows: Borrowings Amount (RM’000) Term loans Secured 11,864 Unsecured 1,874 Total Borrowings 13,738
10. CONTINGENT LIABILITIES
As at the LPD, the Board is not aware of any contingent liabilities incurred or known to be incurred by the IJ Group, which may, upon becoming enforceable, have a material impact on the IJ Group’s financial position or business.
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
40
Audited Unaudited As at 31 December 2015 2016 2017 RM’000 EQUITY Share capital 13,570 13,570 21,189 Reserves 18,077 18,343 11,166 Accumulated losses (5,239) (4,387) (2,224) Equity attributable to owners of Ideal Jacobs 26,408 27,526 30,131 Non-controlling interests (127) (171) - TOTAL EQUITY 26,281 27,355 30,131 TOTAL EQUITY AND LIABILITIES 57,596 60,519 59,498 As at the LPD, there is no known material change in the financial position of IJ Group subsequent to the latest audited financial statements for the FYE 31 December 2016.
8. ACCOUNTING POLICIES
Based on the audited consolidated financial statements of Ideal Jacobs for FYE 31 December 2015 and 31 December 2016 and unaudited consolidated financial statements FYE 31 December 2017, the financial statements have been prepared based on approved Malaysian accounting standards and there was no audit qualification for Ideal Jacob’s financial statements for the respective years under review. There is no change in the accounting standards adopted by Ideal Jacobs which would result in a material variation to the comparable figures for the audited consolidated financial statements of Ideal Jacobs for FYE 31 December 2015 and 31 December 2016 and unaudited consolidated financial statements FYE 31 December 2017.
In light of the Disposal, the operations of the Disposal Subsidiaries have met the criteria to be classified as assets/liabilities held for sale. The unaudited financial statements of IJ Group for the FYE 31 December 2017 have reflected such discontinuing operations.
9. BORROWINGS
As at 31 December 2017, which is not more than 3 months preceding the LPD, the IJ Group has total outstanding borrowings of approximately RM13.74 million, all of which are interest bearing, as follows: Borrowings Amount (RM’000) Term loans Secured 11,864 Unsecured 1,874 Total Borrowings 13,738
10. CONTINGENT LIABILITIES
As at the LPD, the Board is not aware of any contingent liabilities incurred or known to be incurred by the IJ Group, which may, upon becoming enforceable, have a material impact on the IJ Group’s financial position or business.
40
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
41
11. MATERIAL LITIGATION
As at the LPD, the IJ Group is not involved in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Board is not aware of any proceedings that may materially and adversely affect the Group’s financial position or business.
12. MATERIAL CONTRACTS
Save for the HOA, Acquisition SPA, and the Disposal SPA, the Board confirms that the IJ Group has not entered into any other material contracts (not being contracts entered into in the ordinary course of business) within the 2 years immediately preceding the date of this IAC.
13. OVERVIEW AND PROSPECTS OF THE CONSTRUCTION INDUSTRY, IFM INDUSTRY,
WIDAD BUSINESS GROUP AND THE NEW IJ GROUP
13.1 Overview and outlook of the Malaysian economy The Malaysian economy recorded a stronger growth of 5.9% in the fourth quarter of
2017 (“4Q 2017”) (fourth quarter of 2016 (“4Q 2016”): 4.5%). Growth was supported by domestic demand, particularly private sector spending. On the supply side, all sectors registered a positive growth except mining and quarrying. For the year, the economy grew 5.9% (2016:4.2%), surpassing the earlier estimation of 5.2% - 5.7%.
Domestic demand grew by 6.2% in 4Q 2017 (4Q 2016: 3.2%), supported by
continued expansion in both private sector expenditure (7.4%; 4Q 2016: 5.9%) and public sector spending (3.4%; 4Q 2016: -2.6%).
Private consumption recorded a growth of 7.0% (4Q 2016: 6.1%), supported by steady employment and wage growth. Key segments which recorded higher consumer spending were communication, restaurants & hotels, and food & non-alcoholic beverages.
Headline inflation increased to 3.5% in 4Q 2017 (4Q 2016: 1.6%) largely attributed
to price increases of the transport; food and non-alcoholic beverages; as well as housing, water, electricity, gas and other fuels groups.
The construction sector continued to register a strong growth of 5.8% (4Q 2016:
5.1%) reinforced by higher civil engineering activities. Civil engineering subsector strengthened by 14.2% (4Q 2016: 10.0%) mainly due to construction of utility and transport infrastructure projects.
(Source: Malaysian Economy - Fourth Quarter 2017, Ministry of Finance Malaysia) Given the continued strong performance in 4Q 2017, the Malaysian economy
recorded a strong growth of 5.9% in 4Q 2017. At this point, compared to the beginning of the year, there are considerable improvements in the operating environment of the economy.
Headline inflation moderated slightly in 4Q 2017 due mainly to lower inflation in the housing, water, electricity, gas and other fuels and transport categories, but is expected to be at the upper end of the forecasted range of 3% - 4% for 2017 as a whole
(Source: Quarterly Bulletin – Fourth Quarter 2017, Bank Negara Malaysia)
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
41
11. MATERIAL LITIGATION
As at the LPD, the IJ Group is not involved in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Board is not aware of any proceedings that may materially and adversely affect the Group’s financial position or business.
12. MATERIAL CONTRACTS
Save for the HOA, Acquisition SPA, and the Disposal SPA, the Board confirms that the IJ Group has not entered into any other material contracts (not being contracts entered into in the ordinary course of business) within the 2 years immediately preceding the date of this IAC.
13. OVERVIEW AND PROSPECTS OF THE CONSTRUCTION INDUSTRY, IFM INDUSTRY,
WIDAD BUSINESS GROUP AND THE NEW IJ GROUP
13.1 Overview and outlook of the Malaysian economy The Malaysian economy recorded a stronger growth of 5.9% in the fourth quarter of
2017 (“4Q 2017”) (fourth quarter of 2016 (“4Q 2016”): 4.5%). Growth was supported by domestic demand, particularly private sector spending. On the supply side, all sectors registered a positive growth except mining and quarrying. For the year, the economy grew 5.9% (2016:4.2%), surpassing the earlier estimation of 5.2% - 5.7%.
Domestic demand grew by 6.2% in 4Q 2017 (4Q 2016: 3.2%), supported by
continued expansion in both private sector expenditure (7.4%; 4Q 2016: 5.9%) and public sector spending (3.4%; 4Q 2016: -2.6%).
Private consumption recorded a growth of 7.0% (4Q 2016: 6.1%), supported by steady employment and wage growth. Key segments which recorded higher consumer spending were communication, restaurants & hotels, and food & non-alcoholic beverages.
Headline inflation increased to 3.5% in 4Q 2017 (4Q 2016: 1.6%) largely attributed
to price increases of the transport; food and non-alcoholic beverages; as well as housing, water, electricity, gas and other fuels groups.
The construction sector continued to register a strong growth of 5.8% (4Q 2016:
5.1%) reinforced by higher civil engineering activities. Civil engineering subsector strengthened by 14.2% (4Q 2016: 10.0%) mainly due to construction of utility and transport infrastructure projects.
(Source: Malaysian Economy - Fourth Quarter 2017, Ministry of Finance Malaysia) Given the continued strong performance in 4Q 2017, the Malaysian economy
recorded a strong growth of 5.9% in 4Q 2017. At this point, compared to the beginning of the year, there are considerable improvements in the operating environment of the economy.
Headline inflation moderated slightly in 4Q 2017 due mainly to lower inflation in the housing, water, electricity, gas and other fuels and transport categories, but is expected to be at the upper end of the forecasted range of 3% - 4% for 2017 as a whole
(Source: Quarterly Bulletin – Fourth Quarter 2017, Bank Negara Malaysia)
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
41
11. MATERIAL LITIGATION
As at the LPD, the IJ Group is not involved in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Board is not aware of any proceedings that may materially and adversely affect the Group’s financial position or business.
12. MATERIAL CONTRACTS
Save for the HOA, Acquisition SPA, and the Disposal SPA, the Board confirms that the IJ Group has not entered into any other material contracts (not being contracts entered into in the ordinary course of business) within the 2 years immediately preceding the date of this IAC.
13. OVERVIEW AND PROSPECTS OF THE CONSTRUCTION INDUSTRY, IFM INDUSTRY,
WIDAD BUSINESS GROUP AND THE NEW IJ GROUP
13.1 Overview and outlook of the Malaysian economy The Malaysian economy recorded a stronger growth of 5.9% in the fourth quarter of
2017 (“4Q 2017”) (fourth quarter of 2016 (“4Q 2016”): 4.5%). Growth was supported by domestic demand, particularly private sector spending. On the supply side, all sectors registered a positive growth except mining and quarrying. For the year, the economy grew 5.9% (2016:4.2%), surpassing the earlier estimation of 5.2% - 5.7%.
Domestic demand grew by 6.2% in 4Q 2017 (4Q 2016: 3.2%), supported by
continued expansion in both private sector expenditure (7.4%; 4Q 2016: 5.9%) and public sector spending (3.4%; 4Q 2016: -2.6%).
Private consumption recorded a growth of 7.0% (4Q 2016: 6.1%), supported by steady employment and wage growth. Key segments which recorded higher consumer spending were communication, restaurants & hotels, and food & non-alcoholic beverages.
Headline inflation increased to 3.5% in 4Q 2017 (4Q 2016: 1.6%) largely attributed
to price increases of the transport; food and non-alcoholic beverages; as well as housing, water, electricity, gas and other fuels groups.
The construction sector continued to register a strong growth of 5.8% (4Q 2016:
5.1%) reinforced by higher civil engineering activities. Civil engineering subsector strengthened by 14.2% (4Q 2016: 10.0%) mainly due to construction of utility and transport infrastructure projects.
(Source: Malaysian Economy - Fourth Quarter 2017, Ministry of Finance Malaysia) Given the continued strong performance in 4Q 2017, the Malaysian economy
recorded a strong growth of 5.9% in 4Q 2017. At this point, compared to the beginning of the year, there are considerable improvements in the operating environment of the economy.
Headline inflation moderated slightly in 4Q 2017 due mainly to lower inflation in the housing, water, electricity, gas and other fuels and transport categories, but is expected to be at the upper end of the forecasted range of 3% - 4% for 2017 as a whole
(Source: Quarterly Bulletin – Fourth Quarter 2017, Bank Negara Malaysia)
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
41
11. MATERIAL LITIGATION
As at the LPD, the IJ Group is not involved in any material litigation, claims or arbitration, either as plaintiff or defendant, and the Board is not aware of any proceedings that may materially and adversely affect the Group’s financial position or business.
12. MATERIAL CONTRACTS
Save for the HOA, Acquisition SPA, and the Disposal SPA, the Board confirms that the IJ Group has not entered into any other material contracts (not being contracts entered into in the ordinary course of business) within the 2 years immediately preceding the date of this IAC.
13. OVERVIEW AND PROSPECTS OF THE CONSTRUCTION INDUSTRY, IFM INDUSTRY,
WIDAD BUSINESS GROUP AND THE NEW IJ GROUP
13.1 Overview and outlook of the Malaysian economy The Malaysian economy recorded a stronger growth of 5.9% in the fourth quarter of
2017 (“4Q 2017”) (fourth quarter of 2016 (“4Q 2016”): 4.5%). Growth was supported by domestic demand, particularly private sector spending. On the supply side, all sectors registered a positive growth except mining and quarrying. For the year, the economy grew 5.9% (2016:4.2%), surpassing the earlier estimation of 5.2% - 5.7%.
Domestic demand grew by 6.2% in 4Q 2017 (4Q 2016: 3.2%), supported by
continued expansion in both private sector expenditure (7.4%; 4Q 2016: 5.9%) and public sector spending (3.4%; 4Q 2016: -2.6%).
Private consumption recorded a growth of 7.0% (4Q 2016: 6.1%), supported by steady employment and wage growth. Key segments which recorded higher consumer spending were communication, restaurants & hotels, and food & non-alcoholic beverages.
Headline inflation increased to 3.5% in 4Q 2017 (4Q 2016: 1.6%) largely attributed
to price increases of the transport; food and non-alcoholic beverages; as well as housing, water, electricity, gas and other fuels groups.
The construction sector continued to register a strong growth of 5.8% (4Q 2016:
5.1%) reinforced by higher civil engineering activities. Civil engineering subsector strengthened by 14.2% (4Q 2016: 10.0%) mainly due to construction of utility and transport infrastructure projects.
(Source: Malaysian Economy - Fourth Quarter 2017, Ministry of Finance Malaysia) Given the continued strong performance in 4Q 2017, the Malaysian economy
recorded a strong growth of 5.9% in 4Q 2017. At this point, compared to the beginning of the year, there are considerable improvements in the operating environment of the economy.
Headline inflation moderated slightly in 4Q 2017 due mainly to lower inflation in the housing, water, electricity, gas and other fuels and transport categories, but is expected to be at the upper end of the forecasted range of 3% - 4% for 2017 as a whole
(Source: Quarterly Bulletin – Fourth Quarter 2017, Bank Negara Malaysia)
41
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
42
13.2 Overview of the construction industry and IFM industry 13.2.1 Construction industry
The outlook of the construction industry in Malaysia is positive in the long term. Factors priming growth within the construction industry is likely to come from government-led initiatives and spending particularly relating to infrastructure projects, a sustained economic growth boosting spending and investment in properties, as well as steady population growth. On the supply side, the industry is expected to be boosted by efforts from industry bodies such as Construction Industry Development Board Malaysia and Masters Builders Association Malaysia by providing necessary leadership in spearheading the development of the local construction industry as well as raising profile and pushing for the betterment of the construction industry in Malaysia. In addition, the introduction of the Construction Industry Payment and Adjudication Act 2012 has also served as a strengthened mechanism to address payment disputes and facilitate adjudication within the industry. The construction industry in Malaysia is projected to expand by a CAGR of 8.9% from RM50.09 billion in 2016 to RM76.58 billion in 2021. (Source: Executive summary of the strategic analysis of the IFM Market and the Construction Industry in Malaysia dated 4 January 2018 prepared by Protégé Associates Sdn Bhd in relation to the Proposals, as appearing in the circular to shareholders of Ideal Jacobs dated 4 January 2018)
13.2.2 Overview of the IFM industry
The outlook of the IFM market in Malaysia is positive in the long term. Much of the growth is likely to be driven by growing complexity of facility management that leads to demand for integration. Other factors that are likely to drive further demand is expected to come from an expansion in the construction industry alongside increasing green building practises, government-led spending in facility management as well as a sustained economic growth supporting more spending on facility management. On the supply side, information communication technology evolution in facility management, through the creation of diverse software and tools are set to improve service offerings by market players. Furthermore, the IFM market is also likely to see a rising number of professionals venturing into this field to cater to the increasing demand. The IFM market is projected to expand by a CAGR of 8.1% from RM3.36 billion in 2016 to RM4.95 billion in 2021. (Source: Executive summary of the strategic analysis of the IFM Market and the Construction Industry in Malaysia dated 4 January 2018 prepared by Protégé Associates Sdn Bhd in relation to the Proposals, as appearing in the circular to shareholders of Ideal Jacobs dated 4 January 2018)
13.3 Prospects of Widad Builders Group and the New IJ Group 13.3.1 Prospects and future plans of Widad Builders Group
Widad Builders Group operates within the construction industry and IFM market in Malaysia. Based on the overview and prospects of the construction and IFM industry above, both the construction industry and IFM market are projected to grow by CAGR of 8.9% and 8.1% respectively throughout the period of 2016 to 2021. Widad Builders believes that the prospects of the IFM market are favourable owing to the continuous outsourcing and privatisation efforts by the Malaysian Government. To this end, Widad Builders has been awarded IFM contracts by the Malaysian Government to provide IFM
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
42
13.2 Overview of the construction industry and IFM industry 13.2.1 Construction industry
The outlook of the construction industry in Malaysia is positive in the long term. Factors priming growth within the construction industry is likely to come from government-led initiatives and spending particularly relating to infrastructure projects, a sustained economic growth boosting spending and investment in properties, as well as steady population growth. On the supply side, the industry is expected to be boosted by efforts from industry bodies such as Construction Industry Development Board Malaysia and Masters Builders Association Malaysia by providing necessary leadership in spearheading the development of the local construction industry as well as raising profile and pushing for the betterment of the construction industry in Malaysia. In addition, the introduction of the Construction Industry Payment and Adjudication Act 2012 has also served as a strengthened mechanism to address payment disputes and facilitate adjudication within the industry. The construction industry in Malaysia is projected to expand by a CAGR of 8.9% from RM50.09 billion in 2016 to RM76.58 billion in 2021. (Source: Executive summary of the strategic analysis of the IFM Market and the Construction Industry in Malaysia dated 4 January 2018 prepared by Protégé Associates Sdn Bhd in relation to the Proposals, as appearing in the circular to shareholders of Ideal Jacobs dated 4 January 2018)
13.2.2 Overview of the IFM industry
The outlook of the IFM market in Malaysia is positive in the long term. Much of the growth is likely to be driven by growing complexity of facility management that leads to demand for integration. Other factors that are likely to drive further demand is expected to come from an expansion in the construction industry alongside increasing green building practises, government-led spending in facility management as well as a sustained economic growth supporting more spending on facility management. On the supply side, information communication technology evolution in facility management, through the creation of diverse software and tools are set to improve service offerings by market players. Furthermore, the IFM market is also likely to see a rising number of professionals venturing into this field to cater to the increasing demand. The IFM market is projected to expand by a CAGR of 8.1% from RM3.36 billion in 2016 to RM4.95 billion in 2021. (Source: Executive summary of the strategic analysis of the IFM Market and the Construction Industry in Malaysia dated 4 January 2018 prepared by Protégé Associates Sdn Bhd in relation to the Proposals, as appearing in the circular to shareholders of Ideal Jacobs dated 4 January 2018)
13.3 Prospects of Widad Builders Group and the New IJ Group 13.3.1 Prospects and future plans of Widad Builders Group
Widad Builders Group operates within the construction industry and IFM market in Malaysia. Based on the overview and prospects of the construction and IFM industry above, both the construction industry and IFM market are projected to grow by CAGR of 8.9% and 8.1% respectively throughout the period of 2016 to 2021. Widad Builders believes that the prospects of the IFM market are favourable owing to the continuous outsourcing and privatisation efforts by the Malaysian Government. To this end, Widad Builders has been awarded IFM contracts by the Malaysian Government to provide IFM
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
42
13.2 Overview of the construction industry and IFM industry 13.2.1 Construction industry
The outlook of the construction industry in Malaysia is positive in the long term. Factors priming growth within the construction industry is likely to come from government-led initiatives and spending particularly relating to infrastructure projects, a sustained economic growth boosting spending and investment in properties, as well as steady population growth. On the supply side, the industry is expected to be boosted by efforts from industry bodies such as Construction Industry Development Board Malaysia and Masters Builders Association Malaysia by providing necessary leadership in spearheading the development of the local construction industry as well as raising profile and pushing for the betterment of the construction industry in Malaysia. In addition, the introduction of the Construction Industry Payment and Adjudication Act 2012 has also served as a strengthened mechanism to address payment disputes and facilitate adjudication within the industry. The construction industry in Malaysia is projected to expand by a CAGR of 8.9% from RM50.09 billion in 2016 to RM76.58 billion in 2021. (Source: Executive summary of the strategic analysis of the IFM Market and the Construction Industry in Malaysia dated 4 January 2018 prepared by Protégé Associates Sdn Bhd in relation to the Proposals, as appearing in the circular to shareholders of Ideal Jacobs dated 4 January 2018)
13.2.2 Overview of the IFM industry
The outlook of the IFM market in Malaysia is positive in the long term. Much of the growth is likely to be driven by growing complexity of facility management that leads to demand for integration. Other factors that are likely to drive further demand is expected to come from an expansion in the construction industry alongside increasing green building practises, government-led spending in facility management as well as a sustained economic growth supporting more spending on facility management. On the supply side, information communication technology evolution in facility management, through the creation of diverse software and tools are set to improve service offerings by market players. Furthermore, the IFM market is also likely to see a rising number of professionals venturing into this field to cater to the increasing demand. The IFM market is projected to expand by a CAGR of 8.1% from RM3.36 billion in 2016 to RM4.95 billion in 2021. (Source: Executive summary of the strategic analysis of the IFM Market and the Construction Industry in Malaysia dated 4 January 2018 prepared by Protégé Associates Sdn Bhd in relation to the Proposals, as appearing in the circular to shareholders of Ideal Jacobs dated 4 January 2018)
13.3 Prospects of Widad Builders Group and the New IJ Group 13.3.1 Prospects and future plans of Widad Builders Group
Widad Builders Group operates within the construction industry and IFM market in Malaysia. Based on the overview and prospects of the construction and IFM industry above, both the construction industry and IFM market are projected to grow by CAGR of 8.9% and 8.1% respectively throughout the period of 2016 to 2021. Widad Builders believes that the prospects of the IFM market are favourable owing to the continuous outsourcing and privatisation efforts by the Malaysian Government. To this end, Widad Builders has been awarded IFM contracts by the Malaysian Government to provide IFM
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
42
13.2 Overview of the construction industry and IFM industry 13.2.1 Construction industry
The outlook of the construction industry in Malaysia is positive in the long term. Factors priming growth within the construction industry is likely to come from government-led initiatives and spending particularly relating to infrastructure projects, a sustained economic growth boosting spending and investment in properties, as well as steady population growth. On the supply side, the industry is expected to be boosted by efforts from industry bodies such as Construction Industry Development Board Malaysia and Masters Builders Association Malaysia by providing necessary leadership in spearheading the development of the local construction industry as well as raising profile and pushing for the betterment of the construction industry in Malaysia. In addition, the introduction of the Construction Industry Payment and Adjudication Act 2012 has also served as a strengthened mechanism to address payment disputes and facilitate adjudication within the industry. The construction industry in Malaysia is projected to expand by a CAGR of 8.9% from RM50.09 billion in 2016 to RM76.58 billion in 2021. (Source: Executive summary of the strategic analysis of the IFM Market and the Construction Industry in Malaysia dated 4 January 2018 prepared by Protégé Associates Sdn Bhd in relation to the Proposals, as appearing in the circular to shareholders of Ideal Jacobs dated 4 January 2018)
13.2.2 Overview of the IFM industry
The outlook of the IFM market in Malaysia is positive in the long term. Much of the growth is likely to be driven by growing complexity of facility management that leads to demand for integration. Other factors that are likely to drive further demand is expected to come from an expansion in the construction industry alongside increasing green building practises, government-led spending in facility management as well as a sustained economic growth supporting more spending on facility management. On the supply side, information communication technology evolution in facility management, through the creation of diverse software and tools are set to improve service offerings by market players. Furthermore, the IFM market is also likely to see a rising number of professionals venturing into this field to cater to the increasing demand. The IFM market is projected to expand by a CAGR of 8.1% from RM3.36 billion in 2016 to RM4.95 billion in 2021. (Source: Executive summary of the strategic analysis of the IFM Market and the Construction Industry in Malaysia dated 4 January 2018 prepared by Protégé Associates Sdn Bhd in relation to the Proposals, as appearing in the circular to shareholders of Ideal Jacobs dated 4 January 2018)
13.3 Prospects of Widad Builders Group and the New IJ Group 13.3.1 Prospects and future plans of Widad Builders Group
Widad Builders Group operates within the construction industry and IFM market in Malaysia. Based on the overview and prospects of the construction and IFM industry above, both the construction industry and IFM market are projected to grow by CAGR of 8.9% and 8.1% respectively throughout the period of 2016 to 2021. Widad Builders believes that the prospects of the IFM market are favourable owing to the continuous outsourcing and privatisation efforts by the Malaysian Government. To this end, Widad Builders has been awarded IFM contracts by the Malaysian Government to provide IFM
42
APPENDIX I – INFORMATION ON IDEAL JACOBS (Cont’d)
43
services to the National Palace located in Jalan Duta, Kuala Lumpur and the Johor Bahru Sentral Building in Johor Bahru, Johor. Leveraging upon its track record and performance in both contracts, Widad Builders aims to bid for more IFM contracts. As part of its efforts to expand its IFM services, Widad Builders is committed to continue investing in resource expansion, such as by developing its employees’ capabilities as well as investing in new software and other tools that can help expand its service offerings.
Widad Builders’ core expertise in the construction industry lies in building construction and civil works, notably the construction of buildings, water supply, drainage and sewerage systems and roads and pavements. Widad Builders aims to expand its construction segment by participating in more government- and privately-funded building construction and civil works projects. By building on its experience, track record as well as various awards and recognition received to date, Widad Builders believes that it is able to secure more tenders of similar scope in the near future. In addition, Widad Builders will continue to broaden its core expertise to enable it to explore opportunities to bid for other types of projects from both the public and private sectors. The construction and IFM industries are intertwined with the property market. As a consequence, growth in the property market spurs building construction, which is expected to also lead to an increasing need for facilities management, prompting more demand for the IFM industry. Straddling both the construction and IFM industries, Widad Builders is confident that its prospects are favourable, as opportunities for future building construction projects are set to offer Widad Builders possibilities to undertake IFM contracts after the completion of construction.
(Source: Management of Widad Builders)
13.3.2 Prospects of the New IJ Group
Upon completion of the Acquisition, WBGSB will emerge as Ideal Jacobs’ new controlling shareholder with an equity interest of more than 50% of Ideal Jacobs’ enlarged issued share capital. It is WBGSB’s intention, as Ideal Jacobs’ new controlling shareholder, to retain Ideal Jacobs’ listing status on the ACE Market of Bursa Securities upon completion of the Proposed Acquisition.
Moving forward, Ideal Jacobs, through the future plans of Widad Builders mentioned above will continue to strengthen its presence in the construction and IFM industries by leveraging on its experience and technical know-how in IFM, road upgrading, building construction, dam upgrading works incorporating the latest technology and innovation in both industries. (Source: Management of Ideal Jacobs)
The rest of this page is intentionally left blank
43
APPENDIX II – FURTHER INFORMATION
44
1. CONSENTS M&A Securities, Kenanga IB and Protégé Associates Sdn Bhd have given and have not subsequently withdrawn their written consent for the inclusion of their names and all references thereto in the form and context in which they appear in this IAC.
2. DISCLOSURE OF INTERESTS AND DEALINGS 2.1 By Ideal Jacobs
(a) Disclosure of interests in the Offeror
As at the LPD, Ideal Jacobs does not have any interest, whether direct or indirect, in the Offeror or convertible securities of the Offeror.
(b) Dealings in the securities of the Offeror
Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Dealing in the securities of Ideal Jacobs
Ideal Jacobs had not dealt, directly or indirectly, in any of its own voting shares or convertible securities during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
2.2 By Directors of Ideal Jacobs
(a) Disclosure of interests in the Offeror
The Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeror as at the LPD.
(b) Dealing in the securities of the Offeror
The Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Disclosure of interests in Ideal Jacobs
Save for the 1,150,075 ESOS Options held by Dato’ Meng Bin and as disclosed below, the Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeree as at the LPD: Direct Indirect
Name No. of IJ
Shares % No. of IJ
Shares %
Andrew Conrad Jacobs(1) 1,289,900 0.94 36,619,600 26.76 Dato’ Meng Bin(2) 1,150,000 0.84 17,436,400 12.74
Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in
Ideal Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act.
APPENDIX II – FURTHER INFORMATION
44
1. CONSENTS M&A Securities, Kenanga IB and Protégé Associates Sdn Bhd have given and have not subsequently withdrawn their written consent for the inclusion of their names and all references thereto in the form and context in which they appear in this IAC.
2. DISCLOSURE OF INTERESTS AND DEALINGS 2.1 By Ideal Jacobs
(a) Disclosure of interests in the Offeror
As at the LPD, Ideal Jacobs does not have any interest, whether direct or indirect, in the Offeror or convertible securities of the Offeror.
(b) Dealings in the securities of the Offeror
Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Dealing in the securities of Ideal Jacobs
Ideal Jacobs had not dealt, directly or indirectly, in any of its own voting shares or convertible securities during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
2.2 By Directors of Ideal Jacobs
(a) Disclosure of interests in the Offeror
The Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeror as at the LPD.
(b) Dealing in the securities of the Offeror
The Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Disclosure of interests in Ideal Jacobs
Save for the 1,150,075 ESOS Options held by Dato’ Meng Bin and as disclosed below, the Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeree as at the LPD: Direct Indirect
Name No. of IJ
Shares % No. of IJ
Shares %
Andrew Conrad Jacobs(1) 1,289,900 0.94 36,619,600 26.76 Dato’ Meng Bin(2) 1,150,000 0.84 17,436,400 12.74
Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in
Ideal Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act.
APPENDIX II – FURTHER INFORMATION
44
1. CONSENTS M&A Securities, Kenanga IB and Protégé Associates Sdn Bhd have given and have not subsequently withdrawn their written consent for the inclusion of their names and all references thereto in the form and context in which they appear in this IAC.
2. DISCLOSURE OF INTERESTS AND DEALINGS 2.1 By Ideal Jacobs
(a) Disclosure of interests in the Offeror
As at the LPD, Ideal Jacobs does not have any interest, whether direct or indirect, in the Offeror or convertible securities of the Offeror.
(b) Dealings in the securities of the Offeror
Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Dealing in the securities of Ideal Jacobs
Ideal Jacobs had not dealt, directly or indirectly, in any of its own voting shares or convertible securities during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
2.2 By Directors of Ideal Jacobs
(a) Disclosure of interests in the Offeror
The Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeror as at the LPD.
(b) Dealing in the securities of the Offeror
The Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Disclosure of interests in Ideal Jacobs
Save for the 1,150,075 ESOS Options held by Dato’ Meng Bin and as disclosed below, the Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeree as at the LPD: Direct Indirect
Name No. of IJ
Shares % No. of IJ
Shares %
Andrew Conrad Jacobs(1) 1,289,900 0.94 36,619,600 26.76 Dato’ Meng Bin(2) 1,150,000 0.84 17,436,400 12.74
Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in
Ideal Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act.
APPENDIX II – FURTHER INFORMATION
44
1. CONSENTS M&A Securities, Kenanga IB and Protégé Associates Sdn Bhd have given and have not subsequently withdrawn their written consent for the inclusion of their names and all references thereto in the form and context in which they appear in this IAC.
2. DISCLOSURE OF INTERESTS AND DEALINGS 2.1 By Ideal Jacobs
(a) Disclosure of interests in the Offeror
As at the LPD, Ideal Jacobs does not have any interest, whether direct or indirect, in the Offeror or convertible securities of the Offeror.
(b) Dealings in the securities of the Offeror
Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Dealing in the securities of Ideal Jacobs
Ideal Jacobs had not dealt, directly or indirectly, in any of its own voting shares or convertible securities during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
2.2 By Directors of Ideal Jacobs
(a) Disclosure of interests in the Offeror
The Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeror as at the LPD.
(b) Dealing in the securities of the Offeror
The Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Disclosure of interests in Ideal Jacobs
Save for the 1,150,075 ESOS Options held by Dato’ Meng Bin and as disclosed below, the Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeree as at the LPD: Direct Indirect
Name No. of IJ
Shares % No. of IJ
Shares %
Andrew Conrad Jacobs(1) 1,289,900 0.94 36,619,600 26.76 Dato’ Meng Bin(2) 1,150,000 0.84 17,436,400 12.74
Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in
Ideal Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act.
APPENDIX II – FURTHER INFORMATION
44
1. CONSENTS M&A Securities, Kenanga IB and Protégé Associates Sdn Bhd have given and have not subsequently withdrawn their written consent for the inclusion of their names and all references thereto in the form and context in which they appear in this IAC.
2. DISCLOSURE OF INTERESTS AND DEALINGS 2.1 By Ideal Jacobs
(a) Disclosure of interests in the Offeror
As at the LPD, Ideal Jacobs does not have any interest, whether direct or indirect, in the Offeror or convertible securities of the Offeror.
(b) Dealings in the securities of the Offeror
Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Dealing in the securities of Ideal Jacobs
Ideal Jacobs had not dealt, directly or indirectly, in any of its own voting shares or convertible securities during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
2.2 By Directors of Ideal Jacobs
(a) Disclosure of interests in the Offeror
The Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeror as at the LPD.
(b) Dealing in the securities of the Offeror
The Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of the Offeror during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
(c) Disclosure of interests in Ideal Jacobs
Save for the 1,150,075 ESOS Options held by Dato’ Meng Bin and as disclosed below, the Directors of Ideal Jacobs do not have any interest, whether direct or indirect, in any voting shares or convertible securities of the Offeree as at the LPD: Direct Indirect
Name No. of IJ
Shares % No. of IJ
Shares %
Andrew Conrad Jacobs(1) 1,289,900 0.94 36,619,600 26.76 Dato’ Meng Bin(2) 1,150,000 0.84 17,436,400 12.74
Notes: (1) Andrew Conrad Jacobs has indirect interest in Ideal Jacobs by virtue of his interest in
Ideal Jacobs Corporation and BAK Investment LLC pursuant to Section 8(4) of the Act.
44
APPENDIX II – FURTHER INFORMATION (Cont’d)
45
(2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse, Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
(d) Dealing in the securities of Ideal Jacobs
Save as disclosed below, the Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of Ideal Jacobs during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
Name Transaction
date Nature of
transaction No. of IJ
Shares
Average transacted price (RM)
Dato’ Meng Bin 19 October
2017 Exercise of
ESOS Options
1,150,000
0.21
2.3 By the persons with whom Ideal Jacobs or any persons acting in concert with it has any arrangement over the Offer Shares As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has entered into any arrangement including any arrangement involving rights over shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which may be an inducement to deal or to refrain from dealing over the Offer Shares.
2.4 By the persons with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent any voting shares or convertible securities of Ideal Jacobs.
2.5 By M&A Securities and funds whose investments are managed by M&A Securities on a discretionary basis (“Discretionary Funds”) (a) Disclosure of interests in Ideal Jacobs
M&A Securities and its Discretionary Funds do not have any interest, whether direct or indirect, in any voting shares or convertible securities of Ideal Jacobs as at the LPD.
(b) Dealing in the securities of Ideal Jacobs
M&A Securities and its Discretionary Funds have not dealt, directly or indirectly, in IJ Shares during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
3. ARRANGEMENT AFFECTING DIRECTORS
(a) As at the LPD, no payment or other benefit will be made or given to any Director as compensation for loss of office or otherwise in connection with the Offer.
(b) As at the LPD, there is no agreement or arrangement between any Director and any other person which is conditional on or dependent upon the outcome of the Offer or otherwise connected with the outcome of the Offer.
(c) As at the LPD, the Offeror and Joint Ultimate Offerors have not entered into any
material contract in which any Director has a material personal interest.
APPENDIX II – FURTHER INFORMATION (Cont’d)
45
(2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse, Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
(d) Dealing in the securities of Ideal Jacobs
Save as disclosed below, the Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of Ideal Jacobs during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
Name Transaction
date Nature of
transaction No. of IJ
Shares
Average transacted price (RM)
Dato’ Meng Bin 19 October
2017 Exercise of
ESOS Options
1,150,000
0.21
2.3 By the persons with whom Ideal Jacobs or any persons acting in concert with it has any arrangement over the Offer Shares As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has entered into any arrangement including any arrangement involving rights over shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which may be an inducement to deal or to refrain from dealing over the Offer Shares.
2.4 By the persons with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent any voting shares or convertible securities of Ideal Jacobs.
2.5 By M&A Securities and funds whose investments are managed by M&A Securities on a discretionary basis (“Discretionary Funds”) (a) Disclosure of interests in Ideal Jacobs
M&A Securities and its Discretionary Funds do not have any interest, whether direct or indirect, in any voting shares or convertible securities of Ideal Jacobs as at the LPD.
(b) Dealing in the securities of Ideal Jacobs
M&A Securities and its Discretionary Funds have not dealt, directly or indirectly, in IJ Shares during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
3. ARRANGEMENT AFFECTING DIRECTORS
(a) As at the LPD, no payment or other benefit will be made or given to any Director as compensation for loss of office or otherwise in connection with the Offer.
(b) As at the LPD, there is no agreement or arrangement between any Director and any other person which is conditional on or dependent upon the outcome of the Offer or otherwise connected with the outcome of the Offer.
(c) As at the LPD, the Offeror and Joint Ultimate Offerors have not entered into any
material contract in which any Director has a material personal interest.
APPENDIX II – FURTHER INFORMATION (Cont’d)
45
(2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse, Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
(d) Dealing in the securities of Ideal Jacobs
Save as disclosed below, the Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of Ideal Jacobs during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
Name Transaction
date Nature of
transaction No. of IJ
Shares
Average transacted price (RM)
Dato’ Meng Bin 19 October
2017 Exercise of
ESOS Options
1,150,000
0.21
2.3 By the persons with whom Ideal Jacobs or any persons acting in concert with it has any arrangement over the Offer Shares As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has entered into any arrangement including any arrangement involving rights over shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which may be an inducement to deal or to refrain from dealing over the Offer Shares.
2.4 By the persons with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent any voting shares or convertible securities of Ideal Jacobs.
2.5 By M&A Securities and funds whose investments are managed by M&A Securities on a discretionary basis (“Discretionary Funds”) (a) Disclosure of interests in Ideal Jacobs
M&A Securities and its Discretionary Funds do not have any interest, whether direct or indirect, in any voting shares or convertible securities of Ideal Jacobs as at the LPD.
(b) Dealing in the securities of Ideal Jacobs
M&A Securities and its Discretionary Funds have not dealt, directly or indirectly, in IJ Shares during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
3. ARRANGEMENT AFFECTING DIRECTORS
(a) As at the LPD, no payment or other benefit will be made or given to any Director as compensation for loss of office or otherwise in connection with the Offer.
(b) As at the LPD, there is no agreement or arrangement between any Director and any other person which is conditional on or dependent upon the outcome of the Offer or otherwise connected with the outcome of the Offer.
(c) As at the LPD, the Offeror and Joint Ultimate Offerors have not entered into any
material contract in which any Director has a material personal interest.
APPENDIX II – FURTHER INFORMATION (Cont’d)
45
(2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse, Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
(d) Dealing in the securities of Ideal Jacobs
Save as disclosed below, the Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of Ideal Jacobs during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
Name Transaction
date Nature of
transaction No. of IJ
Shares
Average transacted price (RM)
Dato’ Meng Bin 19 October
2017 Exercise of
ESOS Options
1,150,000
0.21
2.3 By the persons with whom Ideal Jacobs or any persons acting in concert with it has any arrangement over the Offer Shares As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has entered into any arrangement including any arrangement involving rights over shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which may be an inducement to deal or to refrain from dealing over the Offer Shares.
2.4 By the persons with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent any voting shares or convertible securities of Ideal Jacobs.
2.5 By M&A Securities and funds whose investments are managed by M&A Securities on a discretionary basis (“Discretionary Funds”) (a) Disclosure of interests in Ideal Jacobs
M&A Securities and its Discretionary Funds do not have any interest, whether direct or indirect, in any voting shares or convertible securities of Ideal Jacobs as at the LPD.
(b) Dealing in the securities of Ideal Jacobs
M&A Securities and its Discretionary Funds have not dealt, directly or indirectly, in IJ Shares during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
3. ARRANGEMENT AFFECTING DIRECTORS
(a) As at the LPD, no payment or other benefit will be made or given to any Director as compensation for loss of office or otherwise in connection with the Offer.
(b) As at the LPD, there is no agreement or arrangement between any Director and any other person which is conditional on or dependent upon the outcome of the Offer or otherwise connected with the outcome of the Offer.
(c) As at the LPD, the Offeror and Joint Ultimate Offerors have not entered into any
material contract in which any Director has a material personal interest.
APPENDIX II – FURTHER INFORMATION (Cont’d)
45
(2) Dato’ Meng Bin has indirect interest in Ideal Jacobs by virtue of the shareholding of his spouse, Foo Chong Lee in Ideal Jacobs pursuant to Section 59(11)(c) of the Act.
(d) Dealing in the securities of Ideal Jacobs
Save as disclosed below, the Directors of Ideal Jacobs had not dealt, directly or indirectly, in any voting shares or convertible securities of Ideal Jacobs during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
Name Transaction
date Nature of
transaction No. of IJ
Shares
Average transacted price (RM)
Dato’ Meng Bin 19 October
2017 Exercise of
ESOS Options
1,150,000
0.21
2.3 By the persons with whom Ideal Jacobs or any persons acting in concert with it has any arrangement over the Offer Shares As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has entered into any arrangement including any arrangement involving rights over shares, any indemnity arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which may be an inducement to deal or to refrain from dealing over the Offer Shares.
2.4 By the persons with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent As at the LPD, there is no person with whom Ideal Jacobs or any persons acting in concert with it has borrowed or lent any voting shares or convertible securities of Ideal Jacobs.
2.5 By M&A Securities and funds whose investments are managed by M&A Securities on a discretionary basis (“Discretionary Funds”) (a) Disclosure of interests in Ideal Jacobs
M&A Securities and its Discretionary Funds do not have any interest, whether direct or indirect, in any voting shares or convertible securities of Ideal Jacobs as at the LPD.
(b) Dealing in the securities of Ideal Jacobs
M&A Securities and its Discretionary Funds have not dealt, directly or indirectly, in IJ Shares during the period commencing 6 months before the commencement of the Offer Period and ending on the LPD.
3. ARRANGEMENT AFFECTING DIRECTORS
(a) As at the LPD, no payment or other benefit will be made or given to any Director as compensation for loss of office or otherwise in connection with the Offer.
(b) As at the LPD, there is no agreement or arrangement between any Director and any other person which is conditional on or dependent upon the outcome of the Offer or otherwise connected with the outcome of the Offer.
(c) As at the LPD, the Offeror and Joint Ultimate Offerors have not entered into any
material contract in which any Director has a material personal interest.
45
APPENDIX II – FURTHER INFORMATION (Cont’d)
46
4. SERVICE CONTRACTS
As at the LPD, neither Ideal Jacobs nor its subsidiaries has any service contracts with any Directors or proposed Directors, which have been entered into or amended within 6 months before the commencement of the Offer Period or which are fixed term contracts with more than 12 months to run. For the purpose of this section, the term “service contracts” excludes those expiring or determinable by the employing company without payment of compensation within 12 months from the date of this IAC.
5. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection at the registered office of Ideal Jacobs at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur during normal business hours from Mondays to Fridays (excluding public holidays) from the date of this IAC up to and including the Closing Date:
(a) Memorandum and Articles of Association of Ideal Jacobs; (b) The audited financial statements of Ideal Jacobs for the past 3 FYEs 31 December
2014, 2015 and 2016 as well as the unaudited financial statements of Ideal Jacobs for the FYE 31 December 2017;
(c) the accountants’ report on the financial information of the Widad Builders Group for the
FYEs 31 December 2014, 2015 and 2016; (d) the material contracts referred to in Section 12 of Appendix I; (e) the letters of consent referred to in Section 1 of this Appendix II; and (f) The Notice dated 12 February 2018.
The rest of this page is intentionally left blank
46