SINGAPORE (May 23): Wing Tai Holdings has launched a $94 million takeover offer for Wing Tai Malaysia.

As of Sept 16, Cheng Wai Keung, the majority shareholder of Wing Tai Holdings in Singapore, has a deemed interest of 66.2% in Wing Tai Malaysia.

The Cheng family and its related entity Wing Sun will offer RM1.80 per share (58 cents per share) for the remaining 33.9% stake in Wing Tai Malaysia that it does not own.

The offer price represents some 53% premium over Wing Tai Malaysia’s last traded price of RM1.18 on Monday before both companies requested for trading halts on their respective stock exchanges.

The offer price also translates to RM290.7 million for all offer shares, assuming maximum consideration.

The offer will be funded through deployment of Wing Tai Holding's internal cash balances which stood at $748 million as of March 31 2017.

Wing Tai Holdings has cited greater flexibility in carrying out restructuring of Wing Tai Malaysia, if any, as a reason for the offer.

On a pro-forma basis Wing Tai Holdings should see earnings  per share increase 36.3% and NTA per share increase 1.5%.

Maybank is the financial advisor for this take over exercise.

UOB has a “buy” on Wing Tai Holdings with a target price of $2.54, pegged at a 25% discount to its RNAV of $3.39/share.

“A consolidation of Wing Tai Malaysia could prompt an upward rerating of our RNAV and our target price,” says the UOB analysts in a flash note.