BBR Holdings

[weijian]

hi TTTI,
i dont have an issue with the majority shareholder buying out the minority. It is just with the payment terms (50% above existing market price) that i find interesting.

A few years ago, Yangzijiang shipyard and another consortium actually bought over Baker Tech's 15% stake in PPL shipyard. (Sembmarine owned the other 85% stake) PPL shipyard is in the business of making jackup rigs and its pacific class designs were one of the market leaders. YZJ was looking to scale up the tech curve from ships to rigs. It was a big hoo-haa for Sembmarine as the market wisdom was the Chinese shipyard then had an avenue to gather valuable access to IP and eventually pose a risk to Sembmarine.

So for the case that no competitor in the industry will buy a minority stake in the business, this is generally true but not always, especially if one has a genuine competitive moat and competitors have anything more than a pure profit intent. Sembmarine had to go through law suit to try to make sure the minority stake sale didnt happen.