Zagro Asia

Considering the offer price is 15 cents and the last done price was 24 cents, why can't the majority shareholder just seek waiver for the mandatory unconditional cash offer and save himself the professional fees?

What a joke! http://info.sgx.com/webcorannc.nsf/Annou...endocument

According to the Formal Offer Announcement, the Offer when made will be unconditional in
all respects and the terms of the Offer will be as follows:-
(a) For each Offer Share: S$0.15 Singapore cents (the “Offer Price”) in cash; and
(b) The Offer Shares will be acquired fully-paid and free from all liens, equities,
mortgages, charges, pledges, encumbrances, rights of pre-emption and other third
party rights and interests of any nature whatsoever and together with all rights,
benefits and entitlements attached to them as at the date of the Formal Offer
Announcement, and thereafter attaching to them (including the right to receive and
retain all dividends, rights and other distributions (if any) which may be announced,
declared, made or paid thereon by the Company on or after the date of the Formal
Offer Announcement, together with all interest accrued thereon).
In the event that the record or books closure date for determining the entitlement to
any dividends, rights or other distributions announced or declared by the Company
falls on or after the date of the Formal Offer Announcement, the Offeror and parties
acting in concert with him reserve the right to reduce the Offer Price by the amount of
such dividends, rights or other distributions.
3.2 No Revisions. The Offeror does not intend to revise the Offer Price, except that the Offeror
reserves the right to do so in a competitive situation.

Wonder what is the purpose of making a cash offer way below the market price???

No one in the right mind will accept!!!

the purpose is to comply with sgx guidelines?

Having read some postings on this Zagro thread yesterday, I believe it is necessary to be clear that this S$ 0.15 per share offer by CEO Poh to all Zagro shareholders is but one component in the lengthy sequential Skopini - Zuellig process. This single component, announced in detail yesterday, should not be looked at in isolation - it was envisaged and outlined many months ago, in exactly this form. Because CEO Poh increases his already substantial holding by buying his share of Skopini's holding at S$ 0.15 per share, he is obliged - under the rules - to offer all remaining shareholders exactly the same offer. The actual intent of the process is that no other Zagro shareholder takes up CEO Poh's heavily discounted offer - only a fool would.

The above narrative should not and does not hide the fact that this whole Skopini - Zuellig process is a ridicolously contrived one, which I'm sure has cost Zagro (and thereby its shareholders) a lot more than it should have done - and, worst of all, the downright bad advice from Zagro's Financial Advisors has caused a larger drop in the share price than alternative, more transparent, more simple, less costly and expedient processes would have achieved. As I have said before on this thread, Zagro and its BoD have also badly alienated their overseas based shareholders, by following the silly badly-thought-through process they have adopted, which excluded foreign shareholders from participating. I know of three overseas shareholders who had significant holdings who a) have sold out totally (or almost totally) and b) do not want to hear of Zagro again - this cannot be good for Zagro's share price and its reputation.

It is clear that Zagro's BoD was concerned about the effect on the shareprice of having a large overhang of Zagro shares (~ 25%) on the market. Rightly so. This was the BoD's excuse for following the process they did. But there were and there are far simpler, far easier and far more inclusive processes (i.e. to all shareholders) that they could and should have followed - processes which would have given more robustness to Zagro's share price. For example, the Company could have bought Skopini's holding at S$ 0.15 per share and then cancelled the purchased shares - Zagro's balance sheet could accomodate this. All shareholders would benefit. If there were doubts about the adequacy of the balance sheet (why, I don't know), they could have had a generous (deeply discounted and not burdensome) rights issue, available to all shareholders.

I understand that more than a few in Singapore's financial district are expressing less-than-favourable remarks, even jokes, about Zagro and its financial and legal advisors, over this whole process. They have been mentioned alongside Eratat and Oceanus. Pity. Zagro is a good company, lead by a particularly good man ..........that has been badly advised, in this instance.

Vested

(31-08-2012, 10:23 PM)pianist Wrote: the purpose is to comply with sgx guidelines?

(01-09-2012, 02:27 PM)RBM Wrote: Pity. Zagro is a good company, lead by a particularly good man ..........that has been badly advised, in this instance.

Does that mean that the man is 100% innocent? And that the advisors have to bear the brunt? Don't you think human nature, such as greed and self interest, plays a huge role in this drama?

This is a fair challenge that you make, and make well cif5000. At the very least, this episode does not put Zagro CEO Poh in a good light. He is able to pick up more cheap Zagro shares - so yes........... I believe he must take some of the wrap. I don't want to go further because I am mindfull of the Posting Guidelines issued by kazukirai.

I also believe that by not intervening, the SGX, the regulator, has allowed one constituency (overseas shareholders) to be treated in such a shoddy manner.

Vested

(01-09-2012, 10:55 PM)cif5000 Wrote:

(01-09-2012, 02:27 PM)RBM Wrote: Pity. Zagro is a good company, lead by a particularly good man ..........that has been badly advised, in this instance.

Does that mean that the man is 100% innocent? And that the advisors have to bear the brunt? Don't you think human nature, such as greed and self interest, plays a huge role in this drama?

is it true that for coprorate action in certain circumstances , it could be common that overseas shareholders could not able to participate? if the answer is yes, then it can be quite understandable.

pianist Wrote:is it true that for coprorate action in certain circumstances , it could be common that overseas shareholders could not able to participate? if the answer is yes, then it can be quite understandable.

Generally speaking, as long as you have a local mailing address it doesn't matter if you are an overseas shareholder. The main thing is that correspondence that requires action can be sent to you.

cif5000 Wrote:Don't you think human nature, such as greed and self interest, plays a huge role in this drama?

I remember years ago when I was at the Zagro AGM and I raised the issue of Section 44 credits. Zagro had about $2m of these credits. Poh Beng Swee's reply was that it would cost the company money ($150k IIRC) to conduct a dividend-cum-rights issue, and since there was no benefit to the company there was no point.

From the company perspective, he was correct. But more importantly, given his large shareholding he wouldn't benefit from the Section 44 credits, as the dividends would put him in the top tax bracket. So perhaps in his view he would be spending money (much of it indirectly his) and getting nothing out of it. The fact that doing nothing would deprive small shareholders of their Section 44 credits did not seem to be important. The company did actually allow its Section 44 credits to expire worthless, thus destroying shareholder value.

Very insightful d.o.g. - I really appreciate your sharing of this Zagro AGM recollection.

The reality of the contrived Skopini - Zuelig process, is that Zagro CEO Poh is able to buy more shares at S$ 0.15 - i.e. increase his Zagro shareholding at a very low price. But overral shareholder value has been destroyed here and I sense it will take Zagro some time to recover the trust of overseas shareholders.

Vested

(02-09-2012, 03:47 AM)d.o.g. Wrote:

pianist Wrote:is it true that for coprorate action in certain circumstances , it could be common that overseas shareholders could not able to participate? if the answer is yes, then it can be quite understandable.

Generally speaking, as long as you have a local mailing address it doesn't matter if you are an overseas shareholder. The main thing is that correspondence that requires action can be sent to you.

cif5000 Wrote:Don't you think human nature, such as greed and self interest, plays a huge role in this drama?

I remember years ago when I was at the Zagro AGM and I raised the issue of Section 44 credits. Zagro had about $2m of these credits. Poh Beng Swee's reply was that it would cost the company money ($150k IIRC) to conduct a dividend-cum-rights issue, and since there was no benefit to the company there was no point.

From the company perspective, he was correct. But more importantly, given his large shareholding he wouldn't benefit from the Section 44 credits, as the dividends would put him in the top tax bracket. So perhaps in his view he would be spending money (much of it indirectly his) and getting nothing out of it. The fact that doing nothing would deprive small shareholders of their Section 44 credits did not seem to be important. The company did actually allow its Section 44 credits to expire worthless, thus destroying shareholder value.