ARA Asset Management

ARA majority shareholders have announced that they intend to take the company private at $1.78 per share. Can anyone enlighten me as to why some major US fund managers are selling at $1.70? Surely they could vote for the scheme instead of losing out by 8 cents per share? Unless they feel that the scheme will not go through?

(09-12-2016, 09:27 PM)ricklim1 Wrote: ARA majority shareholders have announced that they intend to take the company private at $1.78 per share. Can anyone enlighten me as to why some major US fund managers are selling at $1.70? Surely they could vote for the scheme instead of losing out by 8 cents per share? Unless they feel that the scheme will not go through?

Hi, I can't speak for the funds, but I recently sold my shares as well.

My rationale is, the scheme of arrangement (SOA) has a "headcount condition" (check out this blog: http://fifthperson.com/why-we-will-be-re...per-share/)

Hence, I'd say the success rate of it going through is circa 50-50? And I am also not sure when will the voting take place, and when will I actually receive the money (perhaps at least 1 to 2 more months, maybe more). At the mean time, there were many opportunities out there (especially before the "Trump Rally"), based on time value of money and the opportunities presented to me, it made sense to me (at that time) to divest, get the cash immediately, and forgo the potential 4-5% upside, that may or may not be realized.

I felt that the market price was "fair", and I was in the money, so I sold.

Hope that helped.

My take is those who purchased recently will vote for yes. Which may mean that there is a higher chance that the scheme will go through if the recent volume is high? A 8 cents profit (4.5% p.a. returns) seems good to me.

[Image: t69h7o.jpg]

On the share-count condition, assuming all eligible Scheme shareholders would vote (present or through proxy”) – the scheme would fail if scheme shareholders of at least 134,044,452 shares vote against it.
 
If (John Lim + JL philanthropy Ltd)’s scheme shares are further excluded, the number would reduce to 132,095,439 shares (=13.25% of total ARA shares issued).
 
Free-float as at 03-Mar-2016 (as per AR2015) = 33.80%
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http://ara.listedcompany.com/newsroom/20...VTB7.2.pdf
 
This is interesting....................

On page 19:
 
Under the Bermuda Companies Act, those persons who agree to become members of a Bermuda company and whose names are entered on the register of members of such a company are considered members of the company, with rights to attend and vote at general meetings of the company. Depositors holding Shares through CDP are not recognised as Members in respect of the number of Shares credited to their respective Securities Accounts and generally do not have a right under the Bermuda Companies Act to attend and vote at general meetings of the Company. To enable Depositors to attend and vote at the Scheme Meeting as Scheme Shareholders, the Company intends to seek, at the first hearing in the Court for directions to convene the Scheme Meeting, an order of the Court pursuant to which:
 
1.  (i)  each Member who holds Scheme Shares in its own name in the Register of Members will have one vote and the value to be attributed to such person’s vote at the Scheme Meeting will be the number of Scheme Shares held in the name of that person; and
2.  (ii)  in respect of Scheme Shares held by CDP as Member, each Depositor who has Scheme Shares entered against its name in the Depository Register who votes as CDP’s proxy (or nominates any person to vote as CDP’s proxy) at the Scheme Meeting will be counted and its vote taken into account in determining if a majority in number representing three-fourths in value have voted to approve the Scheme at the Scheme Meeting.
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(10-12-2016, 01:42 PM)ValueMushroom Wrote: My take is those who purchased recently will vote for yes. Which may mean that there is a higher chance that the scheme will go through if the recent volume is high? A 8 cents profit (4.5% p.a. returns) seems good to me.

If my interpretation of the SOA is correct, assuming ARA is going to declare a final dividend of 2.7 cents for FY2016, this amount would be deducted from the offer price of SGD 1.78
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ARA FY result out. No final dividends declared.

Result: HERE  

Presentation Slides: HERE

An update on the scheme of arrangment was also released. The Scheme meeting has been scheduled for Mar 31 (Fri).

UPDATE ON STATUS OF SCHEME CONDITIONS

Hi,

Did anybody receive the SIAS invitation for the dialogue session? Are all shareholders invited to RSVP?

Hi lester, I received the SIAS invitation by mail (mail arrived today).
The invitation is also announced by ARA in the SGX website.

EVENT DETAILS
Date/ Day: March 15, 2017 (Wednesday)
Time: 3:00pm – 4:30pm (Registration starts at 2:30pm)
Venue: Level 3, Room 300-302, Suntec Singapore Convention & Exhibition Centre,
1 Raffles Boulevard, Suntec City, Singapore 039593

Kindly RSVP latest by March 10, 2017 (Friday) to SIAS at +65 6227 2683 or email admin@sias.org.sg.
Please provide your Name, Email Address, NRIC No., and Contact No. for registration.
RSVP is on a first come first served basis, as limited seats are available. A confirmation email will be sent to
you one working day before the event.

Important Notes:
 The dialogue session is open to ARA shareholders only.
 Shareholders are not permitted to appoint a proxy to attend the dialogue on their behalf.
 Shareholders are required to bring a copy of their latest CDP Account Statement and proof of identification for verification purposes. Otherwise, you will not be permitted to attend the session.

If you are interested in attending, just email SIAS with the required details.

I wondered why hardcopy CDP account is necessary especially #1 when many of us are on eStatement and #2 the depostior proxy form send by ARA is a perfectly good proof of your shareholdings in the company.

In any case, I am not sure how useful the session is. I can't help but get the feeling that it's a 'sell koyok' session.