Portek International

The advice by Kim Eng that retail shareholders should cash out fast to avoid any deadlock has left some puzzled:

"Given that Mitsui now will have majority control, ICTSI will be hard-pressed for options, once Mr Lam chose to side with the competing bid.
Even if ICTSI raises its bid - it can, at best, secure 40-odd per cent of the shares, and no control. So Kim Eng's Mr Koh has advised retail shareholders to cash out immediately to avoid any deadlock."
"Sweet exit point for Portek shareholders" Business Times Jul 14, 2011

If Mitsui is of the view that Portek will face constraints as a listed entity, then Mitsui may have to pay ICTSI a higher price to ensure delisting. Kim Eng's advice for immediate exit makes sense only if those who have given the irrevocable undertaking to sell to Mitsui may renege, resulting in Mitsui not being able to gain a controlling stake in Portek, and walking out of the offer.
Is Kim Eng foreseeing this possibility.

(18-07-2011, 08:48 AM)portuser Wrote: If Mitsui is of the view that Portek will face constraints as a listed entity, then Mitsui may have to pay ICTSI a higher price to ensure delisting. Kim Eng's advice for immediate exit makes sense only if those who have given the irrevocable undertaking to sell to Mitsui may renege, resulting in Mitsui not being able to gain a controlling stake in Portek, and walking out of the offer.
Is Kim Eng foreseeing this possibility.

It is most unlikely that Larry Lam and his gang will renege their individual irrevocable undertakings to Mitsui & Co, as presumably both sides negotiated the deal in good faith. However, the possibility that Mitsui & Co may have to raise its GO price further is real, if ICTSI chooses not to bite at $1.40/share, and Mitsui & Co is resolute to privatize Portek.

From Reuters..

UPDATE 1-Philippines' ICTSI studying options on Portek bid

Thu, Jul 14 2011

* Says yet to determine best option for shareholders

* ICTSI shares close up 2.7 pct (Adds background, updates share price)

MANILA, July 14 (Reuters) - The Philippines' International Container Terminal Services Inc (ICTSI) said on Thursday it was studying its options on its takeover bid for Singapore's Portek International Ltd after Japan's Mitsui & Co gave a higher offer.

Mitsui said on Wednesday it had an agreement to acquire majority control of Portek after launching a S$221 million ($180 million) bid for the port operator, offering a price of S$1.40 per share, higher than ICTSI's S$1.20.

"ICTSI is currently studying its options to determine what is best for its shareholders," the company told the Philippine Stock Exchange. It did not elaborate, and an ICTSI spokesperson declined to give further comments.

Shares of ICTSI rose 2.7 percent on Thursday to end at nearly 55 Philippine pesos ($1.28), near a peak reached in May and outpacing a gain of 0.4 in the broader market index on the day.

Trading house Mitsui extended its gains on Thursday, rising 1.3 percent at 0436 GMT after posting its biggest daily gain in three weeks on Wednesday.

Mitsui said Portek's majority owners, who control 51.3 percent of the firm, had made an irrevocable agreement to accept its offer.

Portek operates and manages ports in Indonesia, Algeria, Malta, Gabon and Rwanda.

ICTSI already controls about 17 percent of Portek and some analysts said the $2.4 billion Manila-based firm may still increase its bid.

It owns or operates 22 terminal facilities -- six in the Philippines and one each in China, Ecuador, Poland, Brazil, Madagascar, Syria, Georgia, Brunei, Indonesia, Japan, India, Colombia, Argentina, Croatia, Mexico and the United States. ($1 = 43.040 Philippine Pesos) (Reporting by Erik dela Cruz; Editing by Rosemarie Francisco)

Based on the latest position, as at the close of 15Jul11 (last Friday), Mitsui & Co has acquired (since their announcement dated 13Jul11 of its alternative GO for Portek at a higher price of $1.40/share) from the open-market a total of 14.16% of Portek.....
http://info.sgx.com/webcoranncatth.nsf/V...1000C2332/$file/110718_Mitsui_Dealings_Announcement.pdf?openelement
Together with the 51.29% block covered under the irrevocable undertakings given by Larry Lam and concerted parties, Mitsui & Co has now secured 65.45% of Portek, vs. ICTSI's 16.79% of Portek.

hi sorry i just came back yesterday from long overseas trip and wasn't very updated with the sgx announcement yet..so far thus I have been relying on this thread for quick infor digestion..seems like a good news to me.

seems like there may be a potential counter-offer from ICTSI/higher offer from Mitsui to tame ICTSI to take Portek private, in such a case, does it make sense for a minor retail shareholder to just wait for ICTSI's announcement, if any, on whether they will accept the new $1.40 offered price?

If ICTSI is not bent on capitalising its ability to block delisting, or if it holds the view that delsiting is not critical to Mitsui; it would have sold its Portek shares in the open market by now (for its transaction cost should be negligible), and not wait several weeks to acccept the offer and receive the money from Mitsui.

(19-07-2011, 11:28 AM)portuser Wrote: If ICTSI is not bent on capitalising its ability to block delisting, or if it holds the view that delsiting is not critical to Mitsui; it would have sold its Portek shares in the open market by now (for its transaction cost should be negligible), and not wait several weeks to acccept the offer and receive the money from Mitsui.

An elephant moves slowly; and a smart elephant thinks carefully before it makes a move.

Does Portek Mgt need to go through another round of hiring IFA to evaluate's Mitsui Offer?

(19-07-2011, 09:33 PM)pianist Wrote: Does Portek Mgt need to go through another round of hiring IFA to evaluate's Mitsui Offer?

I guess any new IFA opinion on Mitsui & Co's enhanced GO at $1.40/share will not be any different from the first one, and it will be rather useless as Portek's controlling shareholders and management/associates have already together given their irrevocable undertakings to accept Mitsui & Co's offer. We can therefore expect most remaining minority shareholders will tender in their Portek shares to Nomura soon after the issuance of the formal offer document expected on or after 27Jul11 (14 days from the Offer Announcement Date of 13Jul11).

Is ICTSI not allowed to sell its Portek shares during the offer period (that ends today)? If there is such a restriction, hope that ICTSI may intend to force Mitsui to raise its offer price, on the basis that it has not sold any Portek shares, may be misplaced.