Barefoot Investor: Manulife skids to below takeover offer price - (Source: The Edge Online by Joseph Chin)

Shares of Manulife Holdings Bhd fell 7% to RM2.90, which was significantly below its takeover offer price of RM3.22 in late morning on Monday, Nov 29.

At 11.41am, it was down 22 sen to RM2.90 with 10,000 shares done.

The FBM KLCI fell 6.72 points to 1,485.33. Turnover was 432.51 million shares valued at RM812.69 million.

On Nov 16, The Edge FinancialDaily reported independent adviser, AmInvestment Bank Bhd said the takeover offer for Manulife Holdings Bhd at RM3.22 per share by Manulife Century Holdings (Netherlands) BV was “not fair and not reasonable”.

“We advise and recommend that you reject the offer,” AmInvestment said, adding that the valuation of the insurer was too low.

AmInvestment had said the RM3.22 offer price represented a 17.9% to 22.6% discount to Manulife Holdings’ sum-of-parts value (SOPV) of between RM3.92 and RM4.16 a share.
Against peer valuations, the offer price which translates into a price to SOPV multiple of 0.82 and 0.77 times for Manulife Holdings, is lower than the average 1.64 times price-to-embedded value (EBV) multiple of regional players.

The independent adviser also highlighted that Manulife Holdings’ price-to-SOPV multiple was below the average price-to-EBV ratio of 1.21 times for transactions involving insurers in the region.


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