Guthrie GTS

[Wildreamz]

As a value investor, it makes no business sense to let go a stock at $0.88, that is literally, worth close to a dollar. So.. I think this pretty much answers all the question regarding decision making.

The rest is just commentary.

[smallcaps]

Not so familiar with the company but looking at the historical prices, wats the reason for offer only now? Thought should have offered like 1-2 years ago when the price was much lower... Maybe Jurong Lake District going to boost valuations? Or before the white site opposite Jurong Point gets sold?

We also have to bear in mind that the present GO at $0.88/share was launched after Guthrie GTS paid out $0.0325/share in total dividends for FY12 on 21May13. Antony Salim/Putra Masagung - together already the majority shareholders with a combined 69.15% controlling interest - could have launched the GO earlier say in Jan/Feb13 with an offer price which included the usual crawl-back clause for any future dividends.

So what's the real motivation behind this 2nd-attempt and unconditional GO now being pitched at a much higher offer price of $0.88/share - which is still below the latest (as at 31Mar13) revised NAV/share of $0.9775 (after adjusted for the $0.0325/share in total dividends paid out on 21May13) - and likely financed by borrowed money, to try to mop up more shares from minority shareholders who may turn willing sellers now? Is it possible that there is now an intention or a plan to sell the prized Jurong Point sometime in the future?

Sounds possible, to avoid minoriy objections to selling of its crown jewel. If that's the case then I guess their main objective would be to delist vs make money from offer at a low price? Sell to LKT maybe?

[dydx]

Sounds possible, to avoid minoriy objections to selling of its crown jewel. If that's the case then I guess their main objective would be to delist vs make money from offer at a low price? Sell to LKT maybe?

Why would Guthrie GTS' - or for the matter also LKT's - minority shareholders object to selling the company's 50% stake in JP at a good price based on the prevailing still high valuation of shopping mall assets in Singapore, likely substantially higher than its corresponding carrying BV of $761.03m (extracted from LKT's 1Q results announcement) in the latest 31Mar13 B/S? Presumably a disposal will also lead to the payment of a 'jumbo' special dividend to all shareholders, which is a justified thing to do for the huge gain to be realised from this prized property asset for these 2 companies as the joint developers and owners, for the benefit of their shareholders.

Just like their first GO attempt, I believe it is not easy for Antony Salim/Putra Masagung to delist Guthrie GTS this time, as there should be enough smart-enough investors among the minority shareholders making up more than 10% who just want to see and benefit from all the gains from JP when it is eventually sold. An offer at $0.88 against the latest revised NAV/share of $0.9775 may appear quite reasonable, but if Guthrie GTS eventually sells its 50% stake in JP at say an extra $150.0m premium above its BV - which would add another approx. $0.14 to NAV/share and cash/share - it is obvious that the GO now on the table will make Antony Salim/Putra Masagung quite a lot richer from the additional Guthrie GTS they manage to acquire from the minority shareholders in this rather expensive exercise. Quite obviously, the duo are looking at the realisable value of Guthrie GTS' property assets for their future gains in such investment decisions.

LKT is too small to buy Guthrie GTS' 50% stake in JP. Therefore, it is highly likely that both companies would choose to sell their combined entire interests in JP to the highest bidder.

[Jacmar]

I don't know why you guys think that GTS would want to let go JP. These 2 parties salim/putra are giants and JP is small potato to them. They could well buy up from LKT by making the Lees an offer they cannot refuse. Unlikely LKH can afford to buy from GTS. With minorities in the way it is much more difficult to do this kind of manouvering. Why I said GTS is interested in holding on to JP is that they also managed JP and is building up the mall mgt biz which gives them good recurring income.

whatever it is their intention we will never know. what's on the table right now is that 88 is the bottom for us minorities. should we take it or sit it out for more.....[/align]

[smallcaps]

Sounds possible, to avoid minoriy objections to selling of its crown jewel. If that's the case then I guess their main objective would be to delist vs make money from offer at a low price? Sell to LKT maybe?

Why would Guthrie GTS' - or for the matter also LKT's - minority shareholders object to selling the company's 50% stake in JP at a good price based on the prevailing still high valuation of shopping mall assets in Singapore, likely substantially higher than its corresponding carrying BV of $761.03m (extracted from LKT's 1Q results announcement) in the latest 31Mar13 B/S? Presumably a disposal will also lead to the payment of a 'jumbo' special dividend to all shareholders, which is a justified thing to do for the huge gain to be realised from this prized property asset for these 2 companies as the joint developers and owners, for the benefit of their shareholders.

Just like their first GO attempt, I believe it is not easy for Antony Salim/Putra Masagung to delist Guthrie GTS this time, as there should be enough smart-enough investors among the minority shareholders making up more than 10% who just want to see and benefit from all the gains from JP when it is eventually sold. An offer at $0.88 against the latest revised NAV/share of $0.9775 may appear quite reasonable, but if Guthrie GTS eventually sells its 50% stake in JP at say an extra $150.0m premium above its BV - which would add another approx. $0.14 to NAV/share and cash/share - it is obvious that the GO now on the table will make Antony Salim/Putra Masagung quite a lot richer from the additional Guthrie GTS they manage to acquire from the minority shareholders in this rather expensive exercise. Quite obviously, the duo are looking at the realisable value of Guthrie GTS' property assets for their future gains in such investment decisions.

LKT is too small to buy Guthrie GTS' 50% stake in JP. Therefore, it is highly likely that both companies would choose to sell their combined entire interests in JP to the highest bidder.

If they just want to just get it sold but without giving special dividends...that's not going to sit well with minorities. Like EHL's sale of IT show/COMEX, a lot of profit but not so for dividends.

One other possibilty is that Guthrie wants to sell but LKT does not. Then the buyer would end up having to share control with LKT.

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I don't know why you guys think that GTS would want to let go JP. These 2 parties salim/putra are giants and JP is small potato to them. They could well buy up from LKT by making the Lees an offer they cannot refuse. Unlikely LKH can afford to buy from GTS. With minorities in the way it is much more difficult to do this kind of manouvering. Why I said GTS is interested in holding on to JP is that they also managed JP and is building up the mall mgt biz which gives them good recurring income.

whatever it is their intention we will never know. what's on the table right now is that 88 is the bottom for us minorities. should we take it or sit it out for more.....[/align]

If that's really the case, then LKT is definitely more interesting! One option is to take the offer and buy into LKT, perhaps? Still vested in JP after doing that, right?

[brattzz]

"LKT is too small to buy Guthrie GTS' 50% stake in JP. Therefore, it is highly likely that both companies would choose to sell their combined entire interests in JP to the highest bidder."

Agreed on this... Highest Bidder can easily do a J-REITs on JP...

SPH may looks like a fellow with a DEEP POCKET now...

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whatever it is their intention we will never know. what's on the table right now is that 88 is the bottom for us minorities. should we take it or sit it out for more.....[/align]

If no other BETTER investment opportunities for deploying ur $.. why sell? Hang on to a GOOD Biz which you already own!
Or, ADD MORE!

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As a value investor, it makes no business sense to let go a stock at $0.88, that is literally, worth close to a dollar. So.. I think this pretty much answers all the question regarding decision making.

The rest is just commentary.

Agreed. Hang on to it! Don't let them snatch it! :O

[greengiraffe]

Hi Jacmar,

I strongly agree with your reasoning. Salim/Putra is definitely very big and seriously there is no way that many ordinary folks will be able to know where their sources of income are from.

I think their attempt to delist Guthrie is to provide flexibility for both of them to further invest in properties via Guthrie in the future. Being a private company helps in a great way.

GG

I don't know why you guys think that GTS would want to let go JP. These 2 parties salim/putra are giants and JP is small potato to them. They could well buy up from LKT by making the Lees an offer they cannot refuse. Unlikely LKH can afford to buy from GTS. With minorities in the way it is much more difficult to do this kind of manouvering. Why I said GTS is interested in holding on to JP is that they also managed JP and is building up the mall mgt biz which gives them good recurring income.

whatever it is their intention we will never know. what's on the table right now is that 88 is the bottom for us minorities. should we take it or sit it out for more.....[/align]

[Jacmar]

Looks like the vol transacted is drying up. I suspect that the selling queue at 88 is fake. can any forummer check as to who are the ones selling.

[BlueKelah]

All the minorities are greedy and won't sell lah, so basically the share will stuck at 88cent until the offer expires then share price will down. Everyone hoping to get more for Jurong point

[byfaith]

i have small lots here, donnt wat to do. when is the offer expiry ?