KUALA LUMPUR: Spectrum Arrangement Sdn Bhd, which intends to take Hume Industries (M) Bhd private, is revising its offer price to RM4.50 from RM4.30.

In a statement to Bursa Malaysia on Monday, March 15, Spectrum said shareholders who had accepted the original offer would be entitled to receive the revised offer price.

Given the 53 million shares (excluding treasury shares) that Spectrum and its parties acting in concert do not already own in Hume, the revised takeover offer will only cost RM10.6 million more. The total cost will come in at RM238.50 million versus about RM228 million under the original offer.

Spectrum is a wholly owned unit of Hong Leong Company (M) Bhd controlled by tycoon Tan Sri Quek Leng Chan.

The privatisation of cash-rich Hume is seen as a good deal for Quek given the building material maker has a cash coffer of RM362.7 million, which is equivalent to nearly RM1.90 per share.

Stripping off the cash per share of RM1.90, Spectrum is paying RM2.60 for Hume’s assets, including its 42% stake in Southern Steel Bhd. Also, it has an integrated cement plant licence that permits Hume to go into the upstream cement business.

The company’s net asset stood at RM5.17 per share as at Dec 31, 2009. Hume’s share price closed at RM4.29 yesterday.

In the statement, Hume said the revised offer price represented 12.5% premium over the last transacted price of RM4 prior to the takeover offer on Jan 13.  

Due to the lacklustre share price performance, the revised offer price of RM4.50 carries a premium of 28.9% over the six-month moving average price and 35% premium over the 12-month moving average price.

Hume share price was hovering between RM2.50 and RM3.50 in the past two years before the privatisation was announced. Hume has hired Public Investment Bank Bhd to be the independent adviser on the takeover exercise.

It is not clear what is in Quek’s mind for Hume after the privatisation. Industry observers, however, said Quek could divest the assets after the privatisation, which was probably worth more than the amount spent on the takeover offer.