03-12-2011, 10:56 AM
In the press release yesterday, SMB Board stated the following:
“The Boer Offer price does not appear to reflect any control premium for SMB, does not recognise the contribution of EDMI Limited (“EDMI”) as a wholly-owned subsidiary and does not appear to reflect the earnings and growth profile of SMB where EDMI contributed approximately 70% of the SMB Group’s earnings before interest and tax and EMDI’s results.”
To investors who surrendered their EDMI shares to SMB in June, this spirited response leaves a bad taste in the mouth.
SMB valued EDMI below $80m with its offer (announced on 28 Mar) of 36c. Boer is now valuing SMB at around $150m. Since EDMI has contributed around 70% of SMB Group's earnings, Boer would have imputed around $100m as the worth of EDMI. If SMB Board thinks $100m is inadequate, then its own $80m is even more undeserved.
Anyway, those who believe in EDMI being able ride on the strong tide of smart metering and bought SMB shares with the proceeds from their tendered EDMI shares should be relieved to know that with the stand taken by SMB Board, Boer may not succeed in taking over a good Singapore company.
“The Boer Offer price does not appear to reflect any control premium for SMB, does not recognise the contribution of EDMI Limited (“EDMI”) as a wholly-owned subsidiary and does not appear to reflect the earnings and growth profile of SMB where EDMI contributed approximately 70% of the SMB Group’s earnings before interest and tax and EMDI’s results.”
To investors who surrendered their EDMI shares to SMB in June, this spirited response leaves a bad taste in the mouth.
SMB valued EDMI below $80m with its offer (announced on 28 Mar) of 36c. Boer is now valuing SMB at around $150m. Since EDMI has contributed around 70% of SMB Group's earnings, Boer would have imputed around $100m as the worth of EDMI. If SMB Board thinks $100m is inadequate, then its own $80m is even more undeserved.
Anyway, those who believe in EDMI being able ride on the strong tide of smart metering and bought SMB shares with the proceeds from their tendered EDMI shares should be relieved to know that with the stand taken by SMB Board, Boer may not succeed in taking over a good Singapore company.