Offer for Allied Technologies ‘not fair and not reasonable’: IFA

Independent financial adviser (IFA) Xandar Capital has deemed the acquisition offer for Allied Technologies by SRS Auto Holdings not fair and not reasonable.

Allied Tech’s independent directors have also agreed with the IFA, and are recommending that shareholders reject the offer.

At S$0.0088 per share, the privatisation offer values the Catalist-listed precision engineering company at S$15.6 million. The privatisation offer is also 20 per cent lower than the last traded price of Allied Tech’s shares.

Founder of fashion company bYSI, Tan Yew Kiat, is the sole shareholder of private car rental and motor financing company SRS. In a filing to the Singapore bourse in June, Allied Tech said that SRS Auto, and persons acting in concert with it, control 42.7 per cent of the total number of issued shares.

In a circular sent to shareholders of the firm on Jul 22, Xandar Capital outlined several reasons for arriving at the conclusion that the offer was neither fair nor reasonable. It noted, among other things, that the offer price is below the estimated value of the shares, which ranges between about S$0.0298 and S$0.0305.

It also highlighted that the group generated profits in FY2020, FY2021 and Q1 2022; and that the group’s financial position was relatively healthy as at Mar 31, 2022.

In making the offer, SRS Auto had said that deal gave shareholders an opportunity to exit their investments since the counter has been suspended from trading. Shares in Allied Tech have been suspended from trading since May 2019.

Earlier this month, shareholders of Allied Tech voted to oust the company’s independent non-executive chairman and chief executive, replacing them with three newly elected directors. The ouster was put to a vote by shareholders at an extraordinary general meeting on Jul 13, with 97 per cent voting in favour. Allied Tech has also made the headlines over S$33 million in escrow funds that have gone missing.