Neratel

"As a result of the acquisition of the shares, Asia Systems Ltd. will announce a mandatory unconditional cash offer for all the remaining shares in NeraTel at the same price of SGD 0.49 per share"

Are shareholders going to reject the offer again? That's like a discount to the current price and it's not very fair to those who bought at 0.495 to 0.525.

(20-11-2012, 09:22 AM)Some-one Wrote: "As a result of the acquisition of the shares, Asia Systems Ltd. will announce a mandatory unconditional cash offer for all the remaining shares in NeraTel at the same price of SGD 0.49 per share"

Are shareholders going to reject the offer again? That's like a discount to the current price and it's not very fair to those who bought at 0.495 to 0.525.

Nera probably will remain status quo. Most minority shareholders will not sell their shares to Asia Systems at the current price.
Except that the major shareholder will change from Eltek to Asia Systems.

With new major shareholder, I wonder whether the dividend policy will change.

(20-11-2012, 09:22 AM)Some-one Wrote: "As a result of the acquisition of the shares, Asia Systems Ltd. will announce a mandatory unconditional cash offer for all the remaining shares in NeraTel at the same price of SGD 0.49 per share"

Are shareholders going to reject the offer again? That's like a discount to the current price and it's not very fair to those who bought at 0.495 to 0.525.

It's different this time round. Whether we like it or not, we're getting a new controlling shareholder ie. Eltek -> Asia Systems. We don't get to vote on this as it looks like it's already a done deal (between Eltek and Asia Systems) in an off-market transaction. What we are going to get to do is to either accept / reject individually the mandatory offer being made to us.

PS. I'm curious what other major announcement (if any) they're going to make as they halted it before mkt open (the Offer announcement was already made earlier at 3am).

---

(20-11-2012, 09:38 AM)yeokiwi Wrote: Nera probably will remain status quo. Most minority shareholders will not sell their shares to Asia Systems at the current price.
Except that the major shareholder will change from Eltek to Asia Systems.

With new major shareholder, I wonder whether the dividend policy will change.

Haiz.... I was hoping for an increased Div (up to 6ct) as EPS had gone up. I won't be very surprised if the new major shareholder will try to reduce it instead (assuming they're unable to delist it)....

Sianz! looks like someone going kill one of my cash cow... why Eltek so keen to sell of Neratel?
I am going to buy more at <0.49 later when trading resume.
Dividend should remain at 4cent (or 3cts)hopefully ...but more growth for this coy!i hope...
(since they say they going to grow this coy but it is NS first foray into infocomm business...)
Ok i assume everything...i better go check my contacts on this NS and their track record!

I dun think Northstar want to takes Neratel private but they have to comply with the takeover code since they bought a majority stake in the company.

I never understand why the takeover code mandates a mandatory offer which is usually a waste of time and money; cos in most instance, I dun think the minority shareholder would sell to the offeror; especially when the offered price is at a discount to the 1 month VWAP. IMO the takeover code should be amended for a mandatory offer to be made only when a significant premium (>10%) over the 1 month VWAP. Otherwise who in his right mind would sell to the offeror??

So Northstar is just going through the motion to comply with the takeover code. And for what?? A silly paper exercise. So I'm pretty sure Nertel wont be delisted; but how the dividend policy would change, only time will tell. But as long as there is no significant change in management or board of directors, hopefully it will remain status quo. (Vested)

Found some old news on Northstar,

Jakarta Globe dated 8 Jun 10

Reuters dated 8 Sep 11

Mentions of GIC as co-investor in the 2010 article and TPG having a stake in Northstar in 2011 article. Not sure if relations still valid, now in 2012.
Looks like quite a major shift from their original focus on taking stakes in Indonesia co. to now their 1st in an SGX listco and a majority stake at that.

---

News article by FT dated 20 Oct 11 on Northstar Equity Partners III (mentioned under 3.1 Offeror - seems to me, a confusing web of relations of the offering party....).

Fund raised was $820M (I assume USD), I think supposedly to invest in Indonesia....

(20-11-2012, 11:12 AM)lonewolf Wrote: I never understand why the takeover code mandates a mandatory offer which is usually a waste of time and money; cos in most instance, I dun think the minority shareholder would sell to the offeror; especially when the offered price is at a discount to the 1 month VWAP. IMO the takeover code should be amended for a mandatory offer to be made only when a significant premium (>10%) over the 1 month VWAP. Otherwise who in his right mind would sell to the offeror??

Well, in case the shareholders have poor view of the offeror or the stock price drops below mandatory offer. I suppose many will rush to sell their shares to offerer if that happens.
Or the share is so illiquid that selling to offeror is a better choice than selling it at market price.

(20-11-2012, 05:11 PM)yeokiwi Wrote:

(20-11-2012, 11:12 AM)lonewolf Wrote: I never understand why the takeover code mandates a mandatory offer which is usually a waste of time and money; cos in most instance, I dun think the minority shareholder would sell to the offeror; especially when the offered price is at a discount to the 1 month VWAP. IMO the takeover code should be amended for a mandatory offer to be made only when a significant premium (>10%) over the 1 month VWAP. Otherwise who in his right mind would sell to the offeror??

Well, in case the shareholders have poor view of the offeror or the stock price drops below mandatory offer. I suppose many will rush to sell their shares to offerer if that happens.
Or the share is so illiquid that selling to offeror is a better choice than selling it at market price

The mandate is a measure to protect minority shareholders. It ensure similar choice also available to minority shareholders.

The takeover code should not decide on behalf of the shareholders IMO.

From DMG,

NeraTel announced this morning that Northstar Group, a fund that manages US$1.2 billion in committed equity capital dedicated to Southeast Asia, has agreed to buy over the group’s parent Eltek Asa’s 50.05% stake at S$0.49/share. As a result of the transaction, Northstar will also extend its offer to the rest of Nera’s shareholders at the same price.

Northstar’s offer price is at a 5.8% discount to the last transacted price and amounted to only 8.4x FY12F P/E and 7.3x FY13F P/E or 8.2% on dividend yield basis.

Key reason for Eltek Asa’s sale is motivated by its stretched financial position and high gearing (gross gearing 102%), rather than any changes in Nera’s strong fundamentals.

Since NeraTel’s incorporation in 1978, the group has cultivated strong branding value, and developed sticky relationships with many reputable Telco providers, especially in the MENA region.

The change in majority ownership to Northstar Group could in fact put Nera on a more stable footing given the former’s track record as an established private equity investor.

We recommend investors to reject Northstar and continue to hold on to their shares. The investment case for Nera:

1) long and established track record,
2) zero borrowings with solid cash hoard and consistent delivery of results
3) profitable growth and impressive ROE of > 30%.

The counter remains as a top pick in the Singapore Tech sector. Reiterate BUY with TP of S$0.66 based on its 5-yr historical average of 9.8x FY13 P/E.

---

From Lim & Tan,

- Northstar Group (which manages US$1.2bln in committed equity capital dedicated to Southeast Asia) has made its first foray into the Singapore market having bought Eltek ASA’s controlling 50.05% stake
in Nera Tel at 49 cents a share (representing a 5.77% discount to Nera Tel’s last traded price of 52 cents and 11.71% discount to the all time high of 55.5 cents achieved on 18 Oct ’12).

- As a result, Northstar Group is launching a mandatory unconditional cash offer at 49 cents a share and does not intend to revise the offer price.

- The above offer is another disappointment for minority shareholders (after the failed 45 cents offer from ST Engineering in June ’12) who had chased the stock up to an all time high of 55.5 cents on 18 Oct’12 and in the last 1.5 months, Nera Tel’s share price has been stuck in a range of 51-55 cents.

- While Eltek ASA cannot complain as the latest offer (coming only 5 months after the failed takeover from ST Engineering) is a significant 17.8% higher (49 cents plus the 4 cents interim dividend), we note that the 49 cents offer price values Nera Tel at a trailing PE of only 8.2x.

- This is meaningfully below its historical average range of 10-11x.

- Nera Tel’s usual 4 cents a share in dividend payment (in Feb ’13) means that its yield remains an attractive 8.16% at 49 cents a share.

- We understand that Eltek ASA is facing pressure from its bankers in Europe to reduce its debt obligations and given that Nera Tel is its crown jewel and the most attractive asset in its portfolio that can be sold to immediately reduce its gearing ratio.

- We had upgraded Nera Tel to buy on 19 Oct ’12 in anticipation of its attractive dividend payment of 4 cents in Feb ’13 and believe the above offer is not attractive for minorities and recommend investors to hold on to their shares and not accept Northstar Group’s offer.

Till 14dec 3,631,500 shares aceptance...1% of capital

I bought more at 0.490-0.495.


http://info.sgx.com/webcoranncatth.nsf/V...500366E0C/$file/MGO_Dealings_Announcement_15_December_2012.pdf?openelement