SINGAPORE (July 9): CIMB Bank maintains Fincantieri Oil & Gas’ offer for Vard Holdings is “not fair but reasonable" in a revised independent financial adviser's (IFA) report after errors were found in the first one.

In its latest circular to shareholders made available in a regulatory filing this morning, CIMB says Fincantieri's exit offer price of 25 cents in cash for each Vard share now represents a discount of around 9.2% to the NAV (net asset value) per share and a 20.1% premium over the NTA (net tangible asset) per share as at March 31, 2018.

This was in comparison to its first circular, which said that the exit offer price represents a discount of around 14.9% to the NAV per share and a premium of 10.6% to the NTA per share as at Dec 31, 2017.

In addition, the exit offer price is priced at a discount of around 14.4% to the RNAV (revalued net asset value) per share as at March 31, compared to the 19.2% discount to the RNAV per share of 30.9 cents as at Dec 31, 2017.

Fincantieri’s April 30 Extraordinary General Meeting (EGM) for Vard shareholders to vote on the delisting ended in dispute after retail investors expressed unhappiness over the errors in the original circular. These included the Sembcorp Marine’s incorrect historical price to net asset value (P/NAV) of 1.2 times, when it the correct figure was supposed to be closer to 1.7 times.

SembMarine was one of eight companies involved in the business of shipbuilding and ship repair of various vessel types whose P/NAV were used by CIMB in its calculations to derive a mean historical P/NAV to compare with that of Vard.

"The inaccuracy in Sembcorp Marine's historical P/NAV multiple has a consequential effect on the mean P/NAV multiple of the comparable companies stated in the IFA letter. The correct multiple (for the mean P/NAV) should be 1.2 times instead of 1.1 times as erroneously stated," said SGX RegCo in a review of the EGM announced on May 10.

Fincantieri's exit offer was at a P/NAV multiple of 0.9 times.

In the revised circular, the mean historical P/NAV of SembMarine has been revised to 1.8 times. This puts the new historical P/NAV of the eight companies at 1.0 times.

Vard was then ordered to hold a new EGM to re-vote on the delisting proposal although Vard argued that the error would not have changed the CIMB’s opinion.

With the latest IFA circular, Fincantieri, which now owns 83.51% of Vard, can now put its new offer to the vote again at a July 24 EGM.

Shares in Vard last traded at 25 cents.