Thomson Medical Centre

(30-10-2010, 11:55 AM)ValueFund Wrote:

It is sad day for us (minority) value investors. Another gem taken private so that we can't participate in future gains and dividends.

Also, the third company in my portfolio this year to be taken private this year. All my research and time spent down the drain. Big sharks eat small fish in this world.

Sigh.

I share the same sentiments as you. I feel TMC has potential to grow even further than the $1.75 offer price. But, my question is that if we all reject his offer, will Peter Lim act in the interest of shareholders just like how TMC management has been doing?

What were the other two companies that were privatized?

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(30-10-2010, 01:24 AM)hongonn Wrote: Hi guys,

Need your enlightenment and your help is much appreciated.

1. Do all the shareholders get the offer of $1.75 per share? Or we only get the offer when Sasteria managed to acquire more than 50% of the shares?

2. If all shareholders do get the offer, what the shareholder got to do to accept the offer? Do we need to mail the offer letter back? I will be away from Singapore from next week for 2 weeks, will it cause any concern?

Thanks again.

1) we only get the offer when Sasteria managed to acquire more than 50% of the shares.

2) A offer letter will be sent out in the next 14-21 days. We have to decide and send back the letter I suppose. It should be a no vote if u decide not to act on the letter I think.

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Quote:Kingsmen and Vicom.

I was looking at Vicom. It has good fundamentals.

For this case, I think Peter Lim is (probably) offering a fairly good price for TMC, and a premium above the last traded price of $1.08. While shareholders may argue that it deprives them of future dividends and earnings arising from being vested in TMC, I guess some possible "advantages" one can derive from this is that you:-

i) Get a substantial capital gain from being vested in the shares of TMC, such that it accounts for at least some of the perceived projected future growth.

ii) Gain the ability to free up some capital to re-deploy into other under-valued companies; or simply just to hold on to the cash till a better opportunity comes.

Most value investors will find it hard to realize the gains on their investment, except through two situations:-

1) A General Offer (such as TMC) or,

2) Substantial over-valuation occurring with the market price, such that it makes better sense to sell and reinvest the proceeds in under-valued companies.

Just my 2-cents. Not vested in TMC.

Thanks taka666 for answering my question.

I supposed it won't be too difficult for the price to hit $1.75 on Monday, because i guess Sasteria can easily acquire more then 50%, they already got almost 40% from the TMC owner. Correct me if i am wrong.

The price of $1.75 is very hard to resist for general shareholder like me. I mean even the business owner who build the entire hospital from scratch willing to let go at this price. Who am i to reject this :p Besides i also don't feel very comfortable a remisier going to run or control the hospital.

Ok let see how the price react on Monday i might decide to sell if the price hit $1.75, since i will be away from home for the next 2-3 week, i could have missed the offer letter.

At $1.75, Peter Lim's conditional (upon securing >50%) GO for TMC is pegged at a historical PER of 31.8x, based on TMC's fully diluted EPS of $0.055 for FY10 (ended 31Aug10). By market norms, this is a very high valuation, and $513m is a princely price to pay for TMC, even though it has a solid, profitable, and well-positioned business.

The price is good enough to have founder Dr WC Cheng and his son - who are smart businessmen as well - decided to give up their controlling 39.34% stake in TMC. As it is unlikely that another suitor will emerge, I suppose it is more or less a forgone conclusion that Peter Lim will succeed in securing >50%, as most other shareholders will be quite happy to accept his offer. If he is lucky enough, he may end up having >90% acceptance, which will allow him to privatize TMC.

I can see there are many happy TMC shareholders around.

The price offered does look very attractive and tempting. Not sure how many shareholders can resist this offer. Some points to ponder over:

1. Can Thomson Medical grow much bigger going forward, after also considering that the founding family has sold off their stake in the business? What is the direction the management intends to steer the company in the future?

2. Will there be any possible synergistic collaboration with TMC Life Sciences in future?

3. Will the founding family still be involved in any capacity in the company? What is the track record of the new management in running this business?

4. What will be the listing status of the company going forward? Are there plans to eventually privatise the company?

(31-10-2010, 07:35 AM)valuehunter Wrote: The price offered does look very attractive and tempting. Not sure how many shareholders can resist this offer. Some points to ponder over:

1. Can Thomson Medical grow much bigger going forward, after also considering that the founding family has sold off their stake in the business? What is the direction the management intends to steer the company in the future?

2. Will there be any possible synergistic collaboration with TMC Life Sciences in future?

3. Will the founding family still be involved in any capacity in the company? What is the track record of the new management in running this business?

4. What will be the listing status of the company going forward? Are there plans to eventually privatise the company?

Hoping that the current management or at least Peter Lim will release an announcement on all these questions.

While i'm pleasantly surprised by the offer price, i'm also wondering why Peter Lim is willing to pay such a high premium over the last traded price. A successful investor himself, it is reasonable to assume that he must have done his calculations before deciding on this price.

(31-10-2010, 04:04 PM)valuehunter Wrote: While i'm pleasantly surprised by the offer price, i'm also wondering why Peter Lim is willing to pay such a high premium over the last traded price. A successful investor himself, it is reasonable to assume that he must have done his calculations before deciding on this price.

Yes I was also wondering why he paid so much more than current trading price. This means that he sees potential for it to grow much further than $1.75.

(31-10-2010, 11:13 AM)taka666 Wrote:

(31-10-2010, 07:35 AM)valuehunter Wrote: The price offered does look very attractive and tempting. Not sure how many shareholders can resist this offer. Some points to ponder over:

1. Can Thomson Medical grow much bigger going forward, after also considering that the founding family has sold off their stake in the business? What is the direction the management intends to steer the company in the future?

2. Will there be any possible synergistic collaboration with TMC Life Sciences in future?

3. Will the founding family still be involved in any capacity in the company? What is the track record of the new management in running this business?

4. What will be the listing status of the company going forward? Are there plans to eventually privatise the company?

Hoping that the current management or at least Peter Lim will release an announcement on all these questions.

Yes. It is difficult to side-guess why Mr Peter Lim paid such a price for the company. Just have to watch out for further announcements on the offer. There should be a sound basis for offering this price or else I see this as too big a joke as Mr Peter Lim should be at least an experienced investor and he should have already consulted some professionals and professional institutions before arriving at this price finally. However, caveat emptor, sometimes so called experienced professionals and institutions can also make blunders on their calculations and projections of the investment worth and potential of a company. There is nothing infallible in this world, and this applies to the future of a company as well.

How about he trying to create some distraction??

He may be pushing this stock for his kakis..

Later he may withdraw the offer just like the Liverpool case...

But all his kakis has already divested with hefty gains in their pockets and all the suckers who chased this counter will be stucked..

How else do the rich get richer?