(Alliance News) - Myanmar Investments International Ltd on Tuesday confirmed it has rejected a merger proposal from Myanmar Strategic Holdings Ltd and said that it will not enter into negotiations in relation to the proposal.
"Having carefully considered the terms of the proposal and discussed them with Myanmar Strategic, the board has concluded that proceeding with the potential transaction would not be in the best interests of Myanmar Investments nor its shareholders as a whole, as the proposed terms of the potential transaction materially undervalue the company and do not attribute fair value to Myanmar Investments' assets, nor their future upside," Myanmar Investments said in its response statement.
Myanmar Investments added that it will continue to focus its efforts on developing current investments to optimise their return potential.
Earlier Tuesday, Myanmar Strategic said that it recently had made a cash and share offer worth 75 US cents per share to its fellow London listing focused on the South East Asia country but that it was "disappointed" that the Myanmar Investments board had failed to progress on the merger offer.
Myanmar Strategic, which develops and manages consumer businesses located in Myanmar, said its USD0.75 per share offer was at a 23% premium to the block sale of Myanmar Investments shares conducted by Stewart Investors Asia Pacific Fund in April at 61 cents per share.
Stewart Investors Asia Pacific Fund had owned a 9.6% stake in Myanmar Investments, but after the sale of 3.7 million shares on April 30 now no longer has any holding in the company.
Myanmar Strategic's offer included 10 cents in cash and one new Myanmar Strategic shares for 16 Myanmar Investments shares.
Shares in Myanmar Investments were untraded at 85 US cents on Tuesday afternoon. Myanmar Strategic shares were untraded at USD10.50 per share.
The company said its offer would provide a more attractive opportunity to Myanmar Investment's shareholders to maintain exposure to a diversified portfolio in a growing market.
It believes a combination of Myanmar Strategic and Myanmar Investments would unlock value within the companies investment portfolios, drive significant value and cost savings and would potentially generate liquidity for shareholders by virtue of a larger market capitalisation.
Myanmar Strategic has asked shareholders of Myanmar Investments to encourage the investment company's board to make progress on the merger offer.
Myanmar Investments was the first Myanmar-focused investment company to be listed on AIM in London. It aims to invest in Myanmar businesses that will benefit from the country's economic development, with its largest investment to date being a 9% shareholding in mobile masts firm Apollo Towers.