TTJ Holdings

The IFA report is out now: https://links.sgx.com/FileOpen/T%20T%20J...eID=721717

Having considered carefully the information available to us as at the Latest Practicable Date, and based on our analyses, we are of the opinion that the financial terms of the Offer are on balance, not fair and not reasonable. Accordingly, we advise the Recommending Directors to recommend Shareholders to REJECT the Offer.

Estimated value range 
On balance, we are of the view that the estimated value of the Shares ranges between S$0.37 and S$0.46, as represented by the ANAV per Share and the RANAV per Share as at 31 January 2022, respectively.

Clearly Mr Teo's offer of 23 cents if far too low. He will need to make a substantially better offer to get over the line. Using a more reasonable 20 per cent discount to RANAV, we would have a value of 36.8 cents. This seems the minimum acceptable offer now considering the IFA's report. 

Shareholders should follow the advice of the IFA and recommending directors and reject Mr Teo's current offer.

In page I-26 of the IFA report, 4 selected Comparable Companies (all direct competitors to TTJ in SG market) - SHS Holdings (listed on SGX), Yongnam Holdings (listed on SGX), Eversendai Corporation (listed on Bursa), GT Steel Construction Group (listed on HKEX) - were highlighted. The most important point to note is that all 4 have been loss-making in last 2 FYs and, except for SHS Holdings, 3 now have very weak B/S which will inhibit them to compete for big projects effectively. So as a main player in the structural steel space in SG, TTJ has emerged much stronger from Covid, and likely already the local champ!

Under Section 8.1 with the heading "Historical Share Price Performance and Trading Liquidity of the Shares" (pages I-9 to I-13), the IFA made observations of TTJ's historical share price performance, including the following important paragraphs..

"We noted the following significant share purchases by Mr Teo since the IPO Date on 1 April 2010:
(i) open market purchase of 400,000 Shares at a consideration of S$0.34 per Share on 28
April 2015; and
(ii) off-market purchases of an aggregate of 60,000,000 Shares comprising (a) 54,723,000
Shares from TH Investments Pte Ltd (wholly-owned by Tat Hong Investments Pte Ltd at
a consideration of S$0.345 per Share), and (b) 5,277,000 Shares from an unnamed seller
at a consideration of S$0.345 per Share, on 28 September 2015.
The aforesaid share purchases resulted in Mr Teo’s aggregate shareholding interests (direct and
indirect) in the Company being increased from 234,500,000 (representing 67.0% of the
shareholding interest in the Company as at the IPO Date on 1 April 2010) to 294,900,000 Shares
(representing 84.4% of the shareholding interests in the Company as at the Latest Practicable
Date).
As a result, Mr Teo accumulated a significant interest in the Company to the extent that the
Company is less than 6 percentage points from crossing the 10% free float threshold as required
under Rule 723 of the Listing Manual. The reduction in the Free Float may have had a bearing
on the subsequent Share price performance and trading liquidity of the Shares."

So minority shareholders can make a joint appeal to Mr Teo : If you really wish to delist TTJ, let's be fair, please just pay us $0.345/share plus a reasonable extra to account for the additional support we have given you since 2015. Thank you.

https://www.businesstimes.com.sg/compani...t-fair-not

IN A surprising move, 4 directors of structural steel specialist TTJ Holdings are recommending that shareholders reject the recent privatisation offer of S$0.23 in cash per share made by THC Venture, an investment holding company held solely by TTJ’s executive chairman Teo Hock Chwee.


The directors in question are, according to TTJ’s website, executive director and chief financial officer Chiong Su Been, lead independent director Lim Yian Poh, as well as independent directors Ling Chien Yien and Leong Yee Yew.

Errr, why is this a surprising move?  Any kind souls to enlighten?

By the way, I noted that Chiong who owns 0.3%, may have already accepted the offer.  (reported by The Edge)
Teo has undertaken to accept the offer in respect of all his shares, as has Chiong Su Been, TTJ's executive director and CFO.
https://www.theedgesingapore.com/news/ma...-valuation

So, is this a situation where Chiong has recommend to reject the offer (in the discharge of her duties as recommending director) while herself accepted the offer for personal reasons?  Whatever, salute her for being professional.

Vested

1) Errr, why is this a surprising move? Any kind souls to enlighten?
Because all 4 directors has been long serving under Boss Teo for over 10 yrs..etc...

2) ED Chiong SB, recommends to reject the offer, BUT yet, accepted Boss Teo's offer... this simply means that,
She don't want to offend her boss too much, .... hahaha! have to hide behind the professional IFA report...

Irrational act...

(27-06-2022, 09:12 AM)brattzz Wrote: 1) Errr, why is this a surprising move?  Any kind souls to enlighten?
Because all 4 directors has been long serving under Boss Teo for over 10 yrs..etc...

2) ED Chiong SB, recommends to reject the offer, BUT yet, accepted Boss Teo's offer... this simply means that,
She don't want to offend her boss too much, .... hahaha! have to hide behind the professional IFA report...

Irrational act...

Hi brattzz

Thanks.  It does seem that IFA report has worked wonders.  Current bid price is way above the offer price (hit a recent high of $0.28)

Boss Teo has to revise his offer else the Conditional VGO will fail.

Am interested to know success ratio of all past Conditional VGO attempts in the SGX.  Anybody know where to dig?

(27-06-2022, 09:40 AM)Yoyo Wrote:

(27-06-2022, 09:12 AM)brattzz Wrote: 1) Errr, why is this a surprising move?  Any kind souls to enlighten?
Because all 4 directors has been long serving under Boss Teo for over 10 yrs..etc...

2) ED Chiong SB, recommends to reject the offer, BUT yet, accepted Boss Teo's offer... this simply means that,
She don't want to offend her boss too much, .... hahaha! have to hide behind the professional IFA report...

Irrational act...

Hi brattzz

Thanks.  It does seem that IFA report has worked wonders.  Current bid price is way above the offer price (hit a recent high of $0.28)

Boss Teo has to revise his offer else the Conditional VGO will fail.

Am interested to know success ratio of all past Conditional VGO attempts in the SGX.  Anybody know where to dig?

success ratio = case by case specific, not a general % to be taken...
If i am Boss Teo, this VGO has created too much heat/attention, maybe stop it and try again next year 2023, though the amount of money needed to force GO all shareholders are still peanuts to him lah,

It's all somewhat his storyboard plan, start low, revise 1x or 2x... until the market gives up...  

28 cts is still cheap for him!!

(27-06-2022, 10:26 AM)brattzz Wrote:

(27-06-2022, 09:40 AM)Yoyo Wrote:

(27-06-2022, 09:12 AM)brattzz Wrote: 1) Errr, why is this a surprising move?  Any kind souls to enlighten?
Because all 4 directors has been long serving under Boss Teo for over 10 yrs..etc...

2) ED Chiong SB, recommends to reject the offer, BUT yet, accepted Boss Teo's offer... this simply means that,
She don't want to offend her boss too much, .... hahaha! have to hide behind the professional IFA report...

Irrational act...

Hi brattzz

Thanks.  It does seem that IFA report has worked wonders.  Current bid price is way above the offer price (hit a recent high of $0.28)

Boss Teo has to revise his offer else the Conditional VGO will fail.

Am interested to know success ratio of all past Conditional VGO attempts in the SGX.  Anybody know where to dig?

success ratio = case by case specific, not a general % to be taken...
If i am Boss Teo, this VGO has created too much heat/attention, maybe stop it and try again next year 2023, though the amount of money needed to force GO all shareholders are still peanuts to him lah,

It's all somewhat his storyboard plan, start low, revise 1x or 2x... until the market gives up...  

28 cts is still cheap for him!!

market condition is bad, I can bet you boss will wait out crash in markets  to come and get lower price. Already said before this Boss is one of those who is not friendly to OPMI. No point to vest this company wont be rewarded well.

(28-06-2022, 10:49 AM)BlueKelah Wrote:

(27-06-2022, 10:26 AM)brattzz Wrote:

(27-06-2022, 09:40 AM)Yoyo Wrote:

(27-06-2022, 09:12 AM)brattzz Wrote: 1) Errr, why is this a surprising move?  Any kind souls to enlighten?
Because all 4 directors has been long serving under Boss Teo for over 10 yrs..etc...

2) ED Chiong SB, recommends to reject the offer, BUT yet, accepted Boss Teo's offer... this simply means that,
She don't want to offend her boss too much, .... hahaha! have to hide behind the professional IFA report...

Irrational act...

Hi brattzz

Thanks.  It does seem that IFA report has worked wonders.  Current bid price is way above the offer price (hit a recent high of $0.28)

Boss Teo has to revise his offer else the Conditional VGO will fail.

Am interested to know success ratio of all past Conditional VGO attempts in the SGX.  Anybody know where to dig?

success ratio = case by case specific, not a general % to be taken...
If i am Boss Teo, this VGO has created too much heat/attention, maybe stop it and try again next year 2023, though the amount of money needed to force GO all shareholders are still peanuts to him lah,

It's all somewhat his storyboard plan, start low, revise 1x or 2x... until the market gives up...  

28 cts is still cheap for him!!

market condition is bad, I can bet you boss will wait out crash in markets  to come and get lower price. Already said before this Boss is one of those who is not friendly to OPMI. No point to vest this company wont be rewarded well.

You clearly are not very well informed on TTJ, BlueKelah. Consider that:

1) The offer is not final;
2) We now know ACRA is looking at the takeover loophole Mr Teo is using. It may not be available to him in future;
3) The current offer is 23 cents vs 46 cents of asset value. Much of this asset value is cash, and TTJ's steel business is consistently profitable. Even if Mr Teo walks away now, there is a good chance TTJ's share price will only be higher in future; and
4) TTJ has net cash of 34.8m, according to IFA report. Mr Teo could use this cash to pay a much higher price while leaving plenty of cash in the business. 

To illustrate the last point, TTJ has 349.5 million shares outstanding, excluding treasury shares. Mr Teo and his daughter own 295.286m shares, which leaves 54.214m remaining shares. If Mr Teo offered 37 cents per share, which is the bottom of the IFA's valuation range, it would cost him $20.06m. That would leave more than $14m in cash in TTJ. Remember that TTJ's steel business is profitable, so the business does not need to hold onto large amounts of cash. In fact, the large cash balance is likely why Mr Teo is attempting to privatise TTJ at this time.

An offer at 37 cents would represent a 61% improvement to Mr Teo's current offer. Even then, it would still be at a 19.6% discount to TTJ's revalued adjusted net asset value of 46 cents per share. In this scenario, he would still leave himself with 24.3 per cent upside to TTJ's liquidation value. This just shows how opportunistic Mr Teo's current bid really is, and why it will not be successful. 

Clearly Mr Teo will have to make a substantially improved offer to be successful. Clearly the market thinks so, as TTJ is trading above the offer price. Minority shareholders want a successful deal too, the only question now is at what price.

https://links.sgx.com/1.0.0/corporate-an...4c5f799334

The takeover party has spoken. There is no increase in offer price.

Hopefully, the boss does not play any more corporate tricks after the likely failure.

One famous trick Singapore companies have been doing is giving very little dividends but pay themselves well in remuneration. This has been ongoing for cases such as LTC Corp, Hong Fok and Best World.

If it does happen, all the best

https://links.sgx.com/FileOpen/Extension...eID=723103

EXTENSION OF CLOSING DATE to 5.30 p.m. (Singapore time) on
22 July 2022 or such later date(s) as may be announced from time to time by or on behalf of
the Offeror.

LEVEL OF ACCEPTANCES till date : 88.72 %

Short of 1.28% to MGO!!!

Boss Teo decides to drag it out and wind it down!

hang on tight!