Portek International

This morning (15Jun11), SIC released a public statement on Portek, more as a guide for the potential bidder (defined as the "Thrid Party" in the announcement) to make known its intention by a certain deadline.....
http://info.sgx.com/webcoranncatth.nsf/V...00000957D/$file/Portek-Public-Statement-by-SIC-14-06-2011.pdf?openelement

Meanwhile, in anticipation of the emergence of a white knight, since 9Jun11 Mr Market has been supporting Portek's share price above ICTSI's GO price of $1.20. In fact, this morning Portek's share price went as high as $1.24.

We are also curious to know who is the WHITE KNIGHT?!

hmm...now this brings us to another possible question - since this 3rd party already indicated his intention of making the offer to Portek's Management way before ICTSI's public announcement, when was this intention being made, and does it in any way cause the share price to ramp up from the 40cents range to the 70 cents range recently? i mean price sensitive infor being leaked out.

i was reading the hsbc letter to shareholders dated 13 June and on pg 3 paragraph a), it said
'in the event that the offer threshold is revised, the revised offer will remain open for another 14 days following such revision and shareholders who have accepted the initial offer will be allowed to withdraw their acceptance with 8 days of the notification of such revision"..

my question - is this a usual condition commonly found in a typical GO? & when is the expiry of the intial offer? is this condition meant to prepare ICTSI to do a counter-offer to the impending higher offer by the white knight?

(15-06-2011, 09:25 PM)pianist Wrote: hmm...now this brings us to another possible question - since this 3rd party already indicated his intention of making the offer to Portek's Management way before ICTSI's public announcement, when was this intention being made, and does it in any way cause the share price to ramp up from the 40cents range to the 70 cents range recently? i mean price sensitive infor being leaked out.

Maybe it was leaked out to ictsi even and they know they can pocket some money for this deal? Haha

Business Times - 23 Jun 2011

Rival bid for Portek? Don't keep market guessing

By JOYCE HOOI

HERE'S a philosophical conundrum for the contemplative investor: if a company says it is interested in buying another company, and no one is around to see it happen, is that company really interested? Better yet - does it exist?

Portek International, the container terminal operator, is turning what could have been an open-and-shut offer by International Container Terminal Services Inc (ICTSI) into something slightly more suspenseful, now that it has said someone else is interested.

That's perfectly fine, but Portek won't say who this other company is and hasn't said if it is making an offer. Apparently, the unnamed party - referred to rather melodramatically as the 'Third Party' - takes longer to make up its mind than a woman in a shoe store.

Even more intriguingly, based on what Portek told the market after ICTSI put its cards on the table, the company knew about this other definitely-maybe-buyer even before ICTSI made its offer known on June 1.

For anyone who paid Portek any heed in 2007 and 2008, this paucity of information is at odds with previous behaviour. Back in October 2007, Portek announced that it had been 'approached by certain parties' for a 'potential acquisition of shares' in Portek. Between then and November 2008, Portek faithfully updated the market with how it continued to be in discussions with those parties. Then the whole thing was dropped because of the financial crisis.

That particular development had seemed every bit as preliminary as the one involving Portek's current Third Party, but the latter took its time to emerge.

In fact, it bears pointing out again - because it's more humane to flog a horse that's already dead - that Portek's founder and chairman Larry Lam had told BT on the day that ICTSI made the offer that whatever he knew, he would have disclosed.

Maybe he, too, subscribed to the theory that if a tree falls in the woods and no one is around to hear it, it didn't actually make an offer to buy his company.

Since news of the other potential buyer was made public, Portek's share price has closed at $1.21 - the highest the stock price has ever been - and a hair above ICTSI's offer price of $1.20.

Someone has been buying at $1.21, and BT has confirmed that it isn't ICTSI. So someone else thinks that Portek is worth more than what ICTSI is prepared to pay for it - or wants it to look like that anyway.

The industry watchdog - the Securities Industry Council (SIC) - has jumped into the fray and ordered the unnamed bidder to make up its mind within 50 days of the date that ICTSI sends out its offer document. This puts the deadline roughly at Aug 11.

Some investors might just sit back past ICTSI's July 20 deadline and wait to see if another higher bid will come along by Aug 11. But that is if there really is another bidder. They could hedge their bets, accept this offer and withdraw it if another higher one comes along. By any measure, the process will be a protracted one. Anyone looking to take his cue from someone in the know will be disappointed. Mr Lam's brother sold some of his shares at $1.20 the day after ICTSI's offer, but has hung on to more than triple that number. What he's waiting for is anyone's guess.

If the reader is well and thoroughly lost by now, then a point has been successfully made; now that the other party has not even been named, retail investors in Portek's stock are being forced to play along in this game and do an inordinate amount of guesswork as to how far they should push their luck.

On a much larger scale last year, when Fortis remained coy about its intentions towards Parkway and SIC had to step in and tell Fortis to make up its mind, at least the market knew that there really was someone other than Khazanah interested in Parkway.

Then, retail investors and other rubber- neckers had the ability to go through Fortis's books and look at its capital-raising actions in order to assess the likelihood of it actually making an offer.

There was still conjecture, no doubt, but at least there was an outline of things to go on; with Portek, it's like someone has turned off the lights. Given that Portek's situation is markedly different from the Parkway-Khazanah-Fortis love triangle, perhaps SIC's approach should be a little different this time, too.

The deadline that SIC put out earlier this month for the unnamed party to announce its intentions was not levelled at Portek, but at this other party. The effect has been more comical than sobering, seeing as to how SIC has addressed the order to an entity whose name it does not know, and whose existence it must take on good faith from Portek.

In concluding its statement, SIC said that it might require 'the Third Party' to be identified 'in the appropriate circumstances'. Er, perhaps the appropriate circumstances are already present, no?

At this morning's (23Jun11) close, Portek hit a high of $1.27, with only very few shares remaining on the 'sell' queue. It does appear that an announcement of the long-awaited alternative offer from a white knight is imminent.

I think this white knight is dressed in white, and that's why SIC is quick to cover its own hind.

agreed. Could be garhment linked.

(23-06-2011, 05:36 PM)cif5000 Wrote: I think this white knight is dressed in white, and that's why SIC is quick to cover its own hind.

A knight dressed in shining white armour will be impressive! I think SIC is just playing its role by setting some ground rules upfront, just in case this ends up as a long drawn-out battle.

If Portek's management headed by Larry Lam does not like ICTSI or its GO of $1.20/share, they will have to bring in the white knight. The white knight, on the other hand, will likely want to secure a prior commitment from Lam and his men to sell their shares to them at a higher but still reasonable price - which will become the white knight's GO price when announced. There should be quite a bit of serious negotiation between the 2 sides. On top of that, the white knight will need sometime to appoint a good enough investment bank and to come up with their battle strategies, as well as to arrange any financing facilities require, before entering the ring for a fight with ICTSI.