Spindex Industries

Even though profits have fallen... cash is accumulating... now sitting on 50m cash... owners hold 75% of the total no. of shares (115m) ... 25% of 115m shares at 0.85 = 24-25m sgd... say offering a 35% premium base on 0.85, which is 1.15 per share it would only cost the coy 33m to buy out. Don't even need a 3rd party...

(31-08-2020, 03:07 PM)wj1984 Wrote: Even though profits have fallen... cash is accumulating... now sitting on 50m cash... owners hold 75% of the total no. of shares (115m) ... 25% of 115m shares at 0.85 = 24-25m sgd... say offering a 35% premium base on 0.85, which is 1.15 per share it would only cost the coy 33m to buy out. Don't even need a 3rd party...

The Tan Family last attempted privatisation in 2017 by way of an unconditional cash offer at $0.85/share and managed to raise their stake to the present 75.3%. If the Tan Family wishes to succeed in another attempt, they better be prepared to pay a reasonable premium over the current NAV/share at $1.10, as the scale of Spindex's regional business operations is now much larger and sustainable profits higher.

It is still likely that the Tan Family may opt to sell their majority stake or the entire business to the highest bidder.

(31-08-2020, 06:44 PM)dydx Wrote:

(31-08-2020, 03:07 PM)wj1984 Wrote: Even though profits have fallen... cash is accumulating... now sitting on 50m cash... owners hold 75% of the total no. of shares (115m) ... 25% of 115m shares at 0.85 = 24-25m sgd... say offering a 35% premium base on 0.85, which is 1.15 per share it would only cost the coy 33m to buy out. Don't even need a 3rd party...

The Tan Family last attempted privatisation in 2017 by way of an unconditional cash offer at $0.85/share and managed to raise their stake to the present 75.3%. If the Tan Family wishes to succeed in another attempt, they better be prepared to pay a reasonable premium over the current NAV/share at $1.10, as the scale of Spindex's regional business operations is now much larger and sustainable profits higher.

It is still likely that the Tan Family may opt to sell their majority stake or the entire business to the highest bidder.

But sadly in SGX rarely do firms get buy out over their NAV i.e. LTC. Don't think the TAN family will sell out as his son is the current de facto leader and is still relative young.

(01-09-2020, 09:22 AM)wj1 Wrote: But sadly in SGX rarely do firms get buy out over their NAV i.e. LTC. Don't think the TAN family will sell out as his son is the current de facto leader and is still relative young.

That's not true. It depends on the quality of the business, its growth and earnings potential, and who is the buyer. Take a look into the past case of Fischer Tech, you will know more..

(01-09-2020, 02:50 PM)dydx Wrote:

(01-09-2020, 09:22 AM)wj1 Wrote: But sadly in SGX rarely do firms get buy out over their NAV i.e. LTC. Don't think the TAN family will sell out as his son is the current de facto leader and is still relative young.

That's not true. It depends on the quality of the business, its growth and earnings potential, and who is the buyer. Take a look into the past case of Fischer Tech, you will know more..

Thanks for citing the example. Reason i mention is there seem to be more cases of buyouts occurring below NAV than above it. Would be curious at the statistics for the last 3 years. 

vested

Hi everyone,

I'm new here, but I have owned Spindex shares for a while.

In a situation where the controlling shareholder of this company wants to buy over my shares, I will not be parting with my shares, if the offer includes any less than a 10% premium over NAV.

Latest NAV of $1.1077 x 1.1 = $1.22 per share

In a situation where a PE fund or competitor is the buyer, I am looking for a minimum of 2 x NAV before I would happily agree.

Latest NAV of $1.1077 x 2 = $2.22 per share

Vested. And sitting tight.

(07-09-2020, 07:20 PM)seventyTimesSeven Wrote: Hi everyone,

I'm new here, but I have owned Spindex shares for a while.

In a situation where the controlling shareholder of this company wants to buy over my shares, I will not be parting with my shares, if the offer includes any less than a 10% premium over NAV.

Latest NAV of $1.1077 x 1.1 = $1.22 per share

In a situation where a PE fund or competitor is the buyer, I am looking for a minimum of 2 x NAV before I would happily agree.

Latest NAV of $1.1077 x 2 = $2.22 per share

Vested. And sitting tight.

Nice valuation you have in mind. The counter was brought to my attention as some of my relatives are on the SH list.

But will sell out if a GO comes along the way

Hi wj1984,

Sure, selling out and exiting a business in a GO has its benefits eg risk reduction, redeployment of cash, etc. 

But the price has to be right and fair to both selller and buyer, in order to make it a fair deal.

(08-09-2020, 09:31 AM)seventyTimesSeven Wrote: Hi wj1984,

Sure, selling out and exiting a business in a GO has its benefits eg risk reduction, redeployment of cash, etc. 

But the price has to be right and fair to both selller and buyer, in order to make it a fair deal.

For sure i would like a high price exit however as mention in my earlier post its hard to achieve such valuations in SGX... Previously the owners were unwilling to let other firms do DD on it

(08-09-2020, 09:33 AM)wj1984 Wrote:

(08-09-2020, 09:31 AM)seventyTimesSeven Wrote: Hi wj1984,

Sure, selling out and exiting a business in a GO has its benefits eg risk reduction, redeployment of cash, etc. 

But the price has to be right and fair to both selller and buyer, in order to make it a fair deal.

For sure i would like a high price exit however as mention in my earlier post its hard to achieve such valuations in SGX... Previously the owners were unwilling to let other firms do DD on it

Based on my reading of the releases at that time, the owners gave the justification that the PE firm wanting to do DD was the owner of a competitor (Innovalues). 

But that will not always be the case for every potential buyer.