SuperBowl Holdings

if the nav of superbowl is indeed worth $1.50, the 'smart' idea seems to be not accepting the offer, the potential for a revised offer or corporate restructuring outweighs the risk that the minority shareholders retain a smaller share base and superbowl remains undervalued with no unlocking of value in near future.
Furthermore, with the increase in share holdings by a substantial shareholder and the offer by the management, it seems wiser to follow the 'smart' money and buy instead of selling now

To motivate higher offer for Superbowl - better to solicit Hiap Hoe shareholders to vote AGAINST the IPT takeover offer.
Since SB and HH has common minority shareholders. e.g. Morph and Pang.

In my opinion, Hiap Hoe Public is leveraging up its balance sheet to do an 'indirect' payout to Hiap Hoe Private via the SB takeover offer.
Although the SB offer price is below the SB's RNAV. So it may be justifiable for HH Public to do so.

HH Public will be leveraged post SB takeover (if any). So any disposal of inv prop/hotels/resi TOP proceeds will be diverted to paying off loans
for SB takeover & Aust. prop devt. Dont expect any special dividends from HH Public after any disposals.

HH Private (HH Public controlling shareholders) would have gotten their pay day from selling 70% SB stake so no need money liao & no incentive to pay out already.
So post-SB takeover, no more near-term catalyst to close RNAV discount to market price. Long wait ahead.

Above are just my opinion and observations. Read at own risk.

Not vested.

(11-10-2013, 10:22 AM)opmi Wrote: To motivate higher offer for Superbowl - better to solicit Hiap Hoe shareholders to vote AGAINST the IPT takeover offer.
Since SB and HH has common minority shareholders. e.g. Morph and Pang.

^Superbowl shareholders who are also Hiap Hoe shareholders.

If shareholders of HHL do not agree HHL to buy Superbowl at $0.75 (i.e. vote against), what is the rationale for them to agree to buy at an even higher price? Ideally, the circular/resolution should be drafted such that it allows buying Superbowl over a range of prices i.e. $0.75 and up to a cap.

From HHH perspective, the higher HHL pays, the more they get. But they don't want HHL to "overpay", on 2 counts.
1. Shareholders will reject.
2. They will have to put back some money into HHL they took out from selling Superbowl.

The common minorities are almost in the same shoe as HHH - except that they get to vote and they can leave without having to top up HHL.

Why should Hiap Hoe minority shareholders vote against the offer?
They and the entire world know that the offer price is extremely low.
Even if they are also shareholders of superbowl, they will still vote for it knowing that a collapse of offer may result in a drop in Superbowl share price and quite likely, that of Hiap hoe too.

Vested

(11-10-2013, 11:26 AM)camelking Wrote: Why should Hiap Hoe minority shareholders vote against the offer?
They and the entire world know that the offer price is extremely low.
Even if they are also shareholders of superbowl, they will still vote for it knowing that a collapse of offer may result in a drop in Superbowl share price and quite likely, that of Hiap hoe too.

Vested

Because, once Hiap Hoe holdings gets the money, they may not have much incentive to increase the dividend.
Technically, HHL buy Superbowl on the cheap, but the money will mainly flow to HHH and HHH is the substantial shareholder of HHL. Essentially, it is like HHL is loaning money to pay HHH.

(11-10-2013, 11:26 AM)camelking Wrote: Why should Hiap Hoe minority shareholders vote against the offer?
They and the entire world know that the offer price is extremely low.
Even if they are also shareholders of superbowl, they will still vote for it knowing that a collapse of offer may result in a drop in Superbowl share price and quite likely, that of Hiap hoe too.

Vested

HH and SB have many common minority shareholders.
IF they want a higher offer for SB, then they should vote against the deal. Why?

Coz the door will then be closed for HH Pte to get money from HH Public. Next alternative will be disposals and special dividends. Which I think is better way to capture the full RNAV value of hotels for SB & HH shareholders. Catalyst still there to pay out special dividends.

If people have not forgotten, Oldman Teo settled the lawsuit, meaning he is waiting (clock ticking) to be paid. HH Pte needs the SB proceeds to pay off Oldman Teo. My guess only.

In the aftermath of SB takeover of HH Public, HH Public shareholders may not get anything. Coz the potential disposal proceeds will be paid towards loans and OZ project devt. HH Pte got their pay day. No more catalyst to pay out special dividends.

my guess and opinion and observations only. Read at own risk.

(11-10-2013, 11:38 AM)yeokiwi Wrote:

(11-10-2013, 11:26 AM)camelking Wrote: Why should Hiap Hoe minority shareholders vote against the offer?
They and the entire world know that the offer price is extremely low.
Even if they are also shareholders of superbowl, they will still vote for it knowing that a collapse of offer may result in a drop in Superbowl share price and quite likely, that of Hiap hoe too.

Vested

Because, once Hiap Hoe holdings gets the money, they may not have much incentive to increase the dividend.
Technically, HHL buy Superbowl on the cheap, but the money will mainly flow to HHH and HHH is the substantial shareholder of HHL. Essentially, it is like HHL is loaning money to pay HHH.

Well, they never paid good dividend in the first place i think.
So, with or without the offer, dividend policy won't change.

Yes, minority shareholders can deny the offer.
Will they get better dividend as an result? Probably not.
What will more likely to happen will be a plunge in HH and SB share price.

Then SB and HH will go back to the thinly traded counters they used to be.

The Teo family can always place out part of their shares to investors if they need some money. Still minority shareholders won't get their dividend.

Did i get it wrong? haha!

Big boys always win.

^ you forgot what is the catalyst that trigger this corporate event.

Quote:The Teo family can always place out part of their shares to investors if they need some money. Still minority shareholders won't get their dividend.

Share placement will be done at a price that is much below NAV and not as desirable as taking SB private, extract cash and retain control of the properties.
Assuming that the sons are in need of money to pay their father and the superbowl's takeover offer fails, they probably will have to consider liquidating part of the assets.

For minority shareholders, liquidating the assets and getting the payout is a better deal since the assets will be sold at market value.

Let's see whether HHH can have the cake and eat it too.

What if

(1) HH Ltd pay HH Holdings for SB stake (about $175m cash).

(2) HH Holdings pay off loan taken to purchase the old man (say $75m cash). Balance $100m

(3) HH Holdings use this $100m to launch takeover of HH Ltd (say 29% stake at 90ct, only $123m or so.

Then like that both companies also delist.... and it cost so little. Very cheap takeover of 2 companies with assets worth more than $1billion.