03/03/2011 - 12:49

Trahar will not increase Kresta bid

03/03/2011 - 12:49

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Ian Trahar has confirmed he will not increase his takeover offer for window coverings manufacturer Kresta Holdings, even though independent analysis of the bid last week found it neither fair nor reasonable.

Trahar will not increase Kresta bid

Ian Trahar has confirmed he will not increase his takeover offer for window coverings manufacturer Kresta Holdings, even though independent analysis of the bid last week found it neither fair nor reasonable.

Mr Trahar said he would not budge on the 32.5 cents per Kresta share offered, as it represented a 20.4 per cent premium to the closing price of Kresta shares of 27 cents on the last trading day prior to the launch of the offer.

"Shareholders who want to exit Kresta now have a clear choice between our 32.5 cents offer and what they may be able to achieve on the market," Mr Trahar said.

An independent report by Deloitte found the fair market value of Kresta shares was between 40 cents and 48 cents each, at least 23 per cent more than Mr Trahar's bid.

But the Deloitte report said in the absence of an alternative offer, and if the bid is unsuccessful, it would be likely for Kresta's share price to fall significantly.

"It is unlikely that the liquidity for Kresta's shares will improve materially in the short toi medium term, if the takeover offer is unsuccessful," Deloitte's report said.

According to Mr Trahar, the takeover bid, through private company Wildweb Enterprises, provides an opportunity to shareholders to exit if they did not wish to be exposed to the ongoing risks associated with Kresta.

"Our offer provides shareholders who wish to exit Kresta in the short term with a rare opportunity in an illiquid market to do so at what we believe is a fair market price," he said.

"We agree with the comments made by both the independent directors and the independent expert in relation to the potential for the Kresta share price to fall, and the lack of liquidity which may impact shareholders' capacity to sell Kresta shares, if our offer is unsuccessful."

At 12:45PM (WST) Kresta shares were steady, trading at 33 cents.

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