Analyzing Latexx Partners' takeover offer
Just before CNY, Latexx surprisingly announcing that the company had accepted a non-binding takeover offer by two private equity funds. However, the deal looks unattractive with limited upside given the offer price of RM3.10 only. For your information, it is only 10.7% above the last trading price of RM2.80 only. About the offer: The offer values Latexx at 8.2x P/E only versus sector's average of 11.7x The takeover offer needs to secure a 75% shareholders' approval as lay out by the new rules With RM3.10 per share, the offer was valued as RM 852.03 million (inclusive of 55.03 million warrants) Would the deal materialize? Finance Malaysia doubt the deal will go through, given the unattractive valuations attached. Please take note that Latexx was one of the largest medical examinations gloves producers globally. By taking over at a mere 8.2x P/E, it would be a very good buy, but not a good sell at all. Another issue which sparks our interest was that the background of the tw...