Penguin International

[ghchua]

Hi ghchua,
I really wish you would not try so hard to quote the rules book here. As the appointed IFA, PrimePartners, despite having a decent market reputation, IMHO, has behaved like a 'two-hand' IFA in this instance, by having given their summary opinion on the Offer as "not fair but reasonable". That I am very sure is confusing to many minority shareholders. This has been picked up by some media as well.

I really wish I would not quote from the rule book here, but then I will not be able to explain clearly why IFAs opinions are being given in this way. OK, I will try to explain it in my own way.

I think we have sort of agree that the offer is not fair, so let me try to explain why IFA deemed it to be reasonable. To determine whether the offer is reasonable or not, the IFA looks at other factors besides the value of the shares as compared to the offer price. This includes factors like trading liquidity, premium over VWAP, its trading price history as compared to NAV, comparison with precedent takeover offers and comparable companies etc, chances of a completing offer etc.

There are so many factors here so I just discuss a few here as you can read the rest in the IFA letter. One is that Penguin shares had been trading below NAV for very long. Secondly, the offer price as compared to VWAP for various periods is mostly higher. Thirdly, trading liquidity had been low. Therefore, taking into all these factors and more, the IFA deemed the offer to be reasonable.