Spindex Industries

(09-02-2017, 09:55 AM)dydx Wrote: Trading of Spindex is halted pending the release of an announcement....
http://infopub.sgx.com/Apps?A=COW_CorpAn...c4faa94865

A positive corporate action coming?

Hopefully not.
I've just initiated small stake yesterday.

Maybe bad news. lolx

Congratulations.to vested VB.

Hong Wei Holdings Ltd Proposes to Privatise Spindex Industries Limited

• The Scheme provides an opportunity for Shareholders, who may find it difficult to exit their investment in Spindex due to the low historical trading liquidity, to realise their entire investment in cash at an attractive premium without incurring brokerage fees
• Cash Consideration of S$0.850 per Share represents an attractive premium over the following benchmarks up to and including 8 February 2017
- 21.4% over the last transacted price of S$0.700 per Share; and
- 23.4% over the 3-month VWAP of S$0.689 per Share
• The Offeror does not intend to increase the Cash Consideration and accordingly, this represents the final price for each Share
• Upon the Scheme becoming effective, Spindex will become a wholly-owned subsidiary of Hong Wei Holdings Ltd

More details in http://infopub.sgx.com/FileOpen/Spindex_...eID=438442

Another buy-out leow!

Two of dydx positions have announced privatization in a span of three days. Good news or bad news? One thing is for sure, time to hunt for the next undervalued company.

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Crappy Price. Should at least be 1SGD given recurring earnings, cash position and growth potential. What is the likelihood of a higher bid?

*vested*

Since the Tan family holds only 25.5% of the company, it might not be a done deal yet.

But believe they will go out to the market tomorrow to buy out all the shares that are available at 85 cents to increase the likelihood that their privatisation will be successful.

Hopefully a competitor will be tempted to offer a slightly higher price since the Tan family will not be able to make any revision to their price.

(09-02-2017, 05:42 PM)Quickbeam Wrote: Crappy Price. Should at least be 1SGD given recurring earnings, cash position and growth potential. What is the likelihood of a higher bid?

*vested*

The announcement says the offeror does not intend to increase the price. So unless there is a third party that shows up with a better price, it is take it or leave it.

It is a scheme of arrangement, which means all-or-nothing. It needs:

i. a majority of shareholders present and voting, representing at least 75% of the shares among those present and voting; and

ii. Court sanction

Court sanction is probably a given. So to block the scheme a shareholder would need to have over 25% of the shares among those present and voting, or get a majority of those present to vote against the deal.

If there are 100 shareholders at the meeting with 20m shares, and among them there is one shareholder with over 5m shares, that one shareholder can block the scheme. Likewise if there are 51 shareholders against the deal, even if they only own 100,000 shares out of the 20m shares present and voting, they will block the deal.

So if you don't like the deal, either own a truckload of shares, or rally an army of small shareholders to your cause. Yeo Seng Chong is the only large non-Tan shareholder disclosed in the annual report, so if he can be persuaded to vote against the deal, that is likely to block it. On the other hand, the Tans would probably have checked with him in advance on whether he would block a deal, so it's not likely that they would have proceeded if he'd signaled opposition.

Well, they are allowed to raise the price? It can imply all or nothing, but is there anything blocking them to raise the price. I unfortunately do not have the firepower to block the deal, as this is part of my PA account. Yeo Seng Chong is a value manager. There are some other value managers in the register.

(09-02-2017, 06:52 PM)Quickbeam Wrote: Well, they are allowed to raise the price? It can imply all or nothing, but is there anything blocking them to raise the price. I unfortunately do not have the firepower to block the deal, as this is part of my PA account. Yeo Seng Chong is a value manager.  There are some other value managers in the register.

The initial announcement says they will not raise the price, therefore by Rule 20.2 of the Takeover Code, they CANNOT raise the price for this scheme. So shareholders will either get $0.85 for every share they own or they will get nothing and keep all their shares.

If the scheme is voted down, the Tan family can try again 12 months later, and at that later time they can offer a different price, whether higher or lower, and they can also keep their right to increase the price then.

ok thanks for the info!