VGI Public Company Limited (SET: VGI) recently announced its plan to propose the disposition of its entire 27.06% stake in Roctec Global Public Company Limited (ROCTEC) through a voluntary tender offer (VTO) by BTS Group Holdings Public Company Limited (SET: BTS) and/or one of its subsidiaries.
The proposal will be presented at an Extraordinary General Meeting of Shareholders on October 15, 2024.
The transaction, which involves the sale of 2,196,934,494 ordinary shares of ROCTEC at a price of Baht 1.00 per share, totaling Baht 2,196,934,494, is considered a connected transaction due to BTS being a major shareholder of VGI. The purpose of this divestment is to streamline the business focus within the BTS group, strengthening the overall organization by shedding less relevant assets and enabling VGI to concentrate on core businesses and related investments.
Capital Advantage Company Limited has been appointed as the independent financial advisor to evaluate the reasonableness and appropriateness of the transaction. The advisor believes that the disposal will allow VGI to enhance financial flexibility, receive immediate cash inflow, and facilitate future investments and projects. While there are risks associated with the utilization of proceeds from the asset sale, the advisor deems the transaction to be reasonable after considering the potential benefits for the company and its shareholders.
The valuation of ROCTEC shares using the Market Value Approach suggests a fair value range of Baht 0.68 to 0.90 per share, lower than the tender offer price of Baht 1.00 per share. The independent financial advisor considers the tender offer price to be appropriate as it exceeds the fair value range of ROCTEC shares. Ultimately, the advisor recommends that shareholders approve the connected transaction based on its reasonableness and the favorable pricing of the offer.
This IFA report provides an opinion only on the connected transaction concerning the Share Disposition Transaction. Thus, the IFA only opined on the fair value of Hello LED.
The Discounted Cash Flow Approach analyzes the historical operating results, cash flow generating capability, and future operating performance of Hello LED. The approach calculates future cash flow stream from financial projection based on assumptions from publicly-disclosed information under the current economic condition and circumstances. If there is any change that will materially affect the said assumptions, the future operating results of Hello LED might not be as projected or the variables used in the share valuation might change accordingly, hence, leading to a relative change in the share value.
CapAd is of the opinion that the Discounted Cash Flow Approach is the most appropriate valuation approach for Hello LED shares as it reflects future profitability of Hello LED. Conclusively, CapAd viewed that fair value of Hello LED at 50.00% shareholding is equal to Baht 1,346.50 – 1,936.45 million.
