China Merchants Holdings Pacific

Might be the RMB 1 Billion acquisition. I don't think so it will be a dual listing. Lets see how it go, once the trading is lifted.

( Vested )

China Merchants Holdings (Pacific) to acquire Jiurui Expressway in China

Acquisition continues CMHP’s strategic focus on acquiring quality expressways in key regions in China to develop its toll road business to a sizable scale

The total acquisition price of RMB697.41 million (approximately HK$879.36 million) will be paid in the form of 119.37 million new CMHP shares at an issue price of S$0.985 per new CMHP share and a cash consideration of RMB116.78 million. The cash consideration will be financed using internal cash resources.

http://infopub.sgx.com/FileOpen/Acquisit...eID=306008

Woohoo! Definately better then the previous jiurui deal. Kudos to the management! Sorry.. So overly exicted. Seller must really hate the Nz authority
Eps might drop slightly this year since not profitable yet?

What I like about the deal is that we are paying nearly the same price as offered in 2012 for the same road which had its concession extended by 7 years to 2040. In the original deal, we offered RMB 675 million (for concession till 2033) + RMB 250 million for any concession extension. Now, we are merely paying RMB 697 million for a concession that will last till 2040. Massive reduction in the offer ! Moreover, the total debt held by Jiurui has been reduced from RMB 1.9 billion to RMB 1.5 billion in the same period. Essentially, this reduces the enterprise value by over RMB 600 million. Throw in the toll rate increment, it would seem this is a significantly better deal.

I don't expect it to be loss making once CMP refinances Jiurui debt (probably 6-8%) with offshore HKD or USD debt (2-3%). A 400 bp reduction in RMB 1.5 billion debt service cost works out to RMB 60 million which fairs well compared to the RMB 27 million loss in 2013.

I will study this carefully later and write more if I find anything interesting.

http://infopub.sgx.com/FileOpen/Acquisit...eID=306007 [2014 M&A]

http://infopub.sgx.com/FileOpen/Acquisit...leID=57001 [2012 M&A]

(Vested)

And if I may add, the new shares do not cause dilution to the existing interests. Sellers might be in desperate position to sell.

Why is it a "good" deal? Buying a loss making toll road (though may be profitable after debt restructuring) through issuing new shares with about ~10% dilution... So less profits to distribute to more shares while they take on more debt.

Will probably take a closer look at it tonight.

(21-07-2014, 01:37 PM)piggo Wrote: Why is it a "good" deal? Buying a loss making toll road (though may be profitable after debt restructuring) through issuing new shares with about ~10% dilution... So less profits to distribute to more shares while they take on more debt.

Will probably take a closer look at it tonight.

Warren Buffett: The best time to buy a company is when it's in trouble

(21-07-2014, 01:38 PM)valuebuddies Wrote:

(21-07-2014, 01:37 PM)piggo Wrote: Why is it a "good" deal? Buying a loss making toll road (though may be profitable after debt restructuring) through issuing new shares with about ~10% dilution... So less profits to distribute to more shares while they take on more debt.

Will probably take a closer look at it tonight.

Warren Buffett: The best time to buy a company is when it's in trouble

I dun think CMP is in trouble......

(Not vested)

(21-07-2014, 02:03 PM)Dividend Warrior Wrote:

(21-07-2014, 01:38 PM)valuebuddies Wrote:

(21-07-2014, 01:37 PM)piggo Wrote: Why is it a "good" deal? Buying a loss making toll road (though may be profitable after debt restructuring) through issuing new shares with about ~10% dilution... So less profits to distribute to more shares while they take on more debt.

Will probably take a closer look at it tonight.

Warren Buffett: The best time to buy a company is when it's in trouble

I dun think CMP is in trouble......

(Not vested)

He mean the sellers is in trouble.

What I mean is that Jiurui Expressway is not making profit (ie. trouble), and thus CMPac's proposed acquisition may be at a right time. Market seems don't like the deal, let see what DBS says tomorrow.