Tuesday, October 18, 2011

Boustead lowers Pharmaniaga offer price to RM5.46

KUALA LUMPUR: BOUSTEAD HOLDINGS BHD [] has reduced the offer price for PHARMANIAGA BHD [] shares by 5%'' from RM5.75 to RM5.46 under the restricted offer due to the prevailing market conditions.

It said on Tuesday, Oct 18 the price of RM5.46 per Pharmaniaga share represented an attractive entry level cost into Pharmaniaga.

Boustead cited the relatively stable income stream for Pharmaniaga from the concession held by Pharmaniaga for the distribution of selected medical products to government owned hospitals and the growth prospects of the pharmaceutical industry in Malaysia.

To recap, it had resolved to reduce the offer price under the proposed restricted offer for sale (ROS) and the divestment.

Boustead said a shareholder of Boustead who subscribed for Pharmaniaga shares under the proposed ROS would benefit from the price reduction and is also expected to benefit from the proposed bonus Issue to be undertaken on the basis of one bonus Pharmaniaga share for every 10 existing shares.

The average cost per Pharmaniaga share for a Boustead shareholder under the proposed ROS or an investor under the proposed divestment will be approximately RM4.96 after the proposed Pharmaniaga bonus Issue.

Boustead and its subsidiaries are expected to record losses under the proposed ROS, on the basis of 16.284 million Pharmaniaga shares being offered, a loss of up to about RM4.72 million.

Under the proposed divestment, on the basis that a total of 13.50 million Pharmaniaga shares are divested by Boustead, a loss of up to approximately RM3.92 million.

The Boustead Group is expected to make an aggregate loss of RM8.64 million from the proposed ROS'' and proposed divestment pursuant to the price reduction.

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