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Published on January 26, 2008

Avantgarde Capital, appointed by Ramkhamhaeng Hospital, said in a statement to the Stock Exchange of Thailand that under the market value method, Ramkhamhaeng's fundamental value was in the range of Bt500 to Bt650 per share.

That is higher than the price of Bt480 offered by Bangkok Dusit Medical Services by Bt20 to Bt170 per share or 4.3-35.4 per cent.

"Therefore the offering price of Bt480 per share is lower than the fundamental share value of the company," the adviser said.

The adviser thinks shareholders should not accept this tender at the offering price of Bt480 per share. Ramkhamhaeng stock ended trading on January 17 at Bt564 per share.

Avantgarde said shareholders could sell their shares on the open market, despite some liquidity issues, which could cause problems for those who wanted to sell a large lot.

The merger was expected to benefit both hospital-management companies through synergy in areas such as expanding customer bases, sharing hi-tech equipment and transfer of medical know-how. However, the key terms and conditions of such coordination between both parties have not yet been agreed on, so the adviser places more value on the tender price than the additional benefit the company might derive from the merger.

Avantgarde also pointed out that the tenderor and Ramkhamhaeng were both in the medical-care industry, which might cause a conflict of interest.

"The tenderor currently holds a veto right over any agenda which requires three-fourths of voting rights at the shareholders' meeting. This may affect the company's operation," it said.

The Nation