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The company will change its name from "L.C. Development Ltd" to "LCD Global Investments Ltd".
Further announcement will be made with regard to the effective date of change.
Specuvestor: Asset - Business - Structure.
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what do u mean by a bit too much for commitment...not very clear..dun get it
congrats to those vested, time for a mini celebration soon, huat ah
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Takeover bid for LCD irks some shareholders
PUBLISHED ON APR 23, 2014 1:07 AM
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BY GOH ENG YEOW SENIOR CORRESPONDENT
SOME investors in property developer LCD Global Investments are angry over a takeover bid for the company which they believe is being done on the cheap.
They argue that Monday's bid by RDL Investments comes just as LCD's share price is languishing at low valuation levels - and is way below the firm's book value.
Their ire mirrors unhappiness of shareholders in other firms that have been the target of recent takeover bids at similarly low valuation levels.
The offer by RDL, jointly owned by brothers Raymond and David Lum, who together hold 31.1 per cent of LCD, is for 17 cents a share in the smallish property developer.
That is an 11.84 per cent premium over LCD's last traded price of 15.2 cents on Thursday last week before trading in its shares was halted.
Yesterday, the counter jumped 12.5 per cent to 17.1 cents when it resumed trading. This works out to a small 0.6 per cent premium over the offer price.
One aggrieved LCD investor, Mr Vincent Khoo, noted that the 17 cent takeover offer is priced at a huge discount of 15 cents, or 46.9 per cent, on LCD's net asset value of 32 cents as of end-December last year.
"As far as I can remember, I know of no takeover made at such a ridiculously sharp discount to valuations," he said.
Mr Khoo is also irked by the rationale for the offer: ostensibly to give LCD investors an opportunity to "realise their investment for cash at a premium over market price" and exit their investments "without incurring brokerage and other trading costs".
Mr Khoo said: "Controlling shareholders should not take advantage of market inefficiencies and the weak macro environment to take over a company at such ridiculously low prices, offering lame excuses like offering an exit opportunity."
Instead, he suggested that the majority shareholders should investigate why the shares are not performing and look at ways of enhancing shareholder value.
Lifestyle firm Osim offers a good example, Mr Khoo said.
"When Osim shares dropped to five cents many years ago, its major shareholder did not make an offer, although it could. Osim is now trading at around $2.70. This is how loyal shareholders should be rewarded, and not to be bought out when the share price has dropped so low," he said.
Until late last year, LCD was known as LC Development. Its businesses include high-end hotels and resorts, serviced residences and real estate consultancy. It is also developing an integrated lifestyle complex in Xuzhou in central China and a luxury resort in Phuket, Thailand.
LCD's major shareholder used to be Lum Chang Holdings, also controlled by the Lum brothers, which undertook a capital reduction in 2005 to distribute its LCD stake back to its shareholders.
But the sharp discount to book value which the Lum Brothers are making in their offer for LCD shares is likely to fuel debate about the current spate of takeovers being carried out amid extremely low borrowing costs and languishing share prices.
In other recent takeover efforts, UIC is offering to buy the rest of Singapore Land at a 33.1 per cent discount to book value.
And tycoon Ong Beng Seng had teamed up with Wheelock Properties to buy out his listed firm Hotel Properties (HPL) at what is believed to be as much as a 25 per cent discount to the company's revalued net asset value.
One LCD investor, who identified himself only as Eugene, suggested that its minority shareholders might be better off if the listed property developer does a buyback of its own shares rather than be bought out by its major shareholders.
"LCD appears to have the funds for it," he said.
engyeow@sph.com.sg
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What to do? Local investors are stupid. Look at the Wing Tai partial takeover offer for 51% of the company at the offer price of $1.40. It went through anyway. Many retail investors would prefer to buy WE holdings or some other ridiculous over priced penny stock than good companies like LC Development.
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Anyway, congrats to all those who bought at 14cents!
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