China Merchants Holdings Pacific

[cfa]

Why 97.6% not 90% ?

[marandaz]

As pointed out by other VB, it can be found on page 49 of the TODAY newspaper, as Item #4 that she requires 97.59% to do Compulsory acquisition.

Referring to Page 17 Section 12.2 on Compulsory Acquisition from the GO Doc, it states that she needs to acquire 90% of the shares she DID NOT HOLD on the very moment that GO is announced i.e.
Shares Held Before GO: 75.88%
Compulsory Acquisition Threshold: 75.88% + [90% X (100%-75.88%)] = 75.88% + 21.708% ~= 97.59%

A detail explanation and case study can be found here: http://business.asiaone.com/news/differe...m-takeover

Although she did state that she intend to do a Compulsory acquisition, but do remember this if you think about waiting for the compulsory acquisition.
"Yet the offer might then close with the public float falling under 10 per cent. This leads to a trading suspension, and an inability to easily offload one's shares."

[specuvestor]

Delisting is 90% free float requirement from SGX listing rules while 90% of remaining shares is from companies act/ takeover code. Sometimes acquirer formed a new SPV to circumvent this 90% remaining share issue ie in which case they only need to acquire upto 90% rather than 97.59%.

Unconditional you get paid fast when u tender but you wont get reimbursed for higher offer later; conditional you get paid with everyone unless it turns unconditional or u sell at market.

Just to clarify to forumers based on my understanding:

1) Conditional means the GO may not go through if conditions unmet, so there is downside risk. So if you tender and GO no go you might not be able to sell immediately if you can't ascertain your share status in CDP? Technically it can be conditional on anything including if my dog died, except that SIC is not dead So usually it is conditional on 50%, 90%, AGM approval, whitewash waiver etc. This is under Companies Act. Once it becomes unconditional then it is better to tender than sell in market cause upside revision is built in "free" with no downside, unless you are rushing to get your money by paying brokerage.

2) Compulsory Acquisition is a bit of misnomer cause it is compulsory only if the acquirer or the members exercise their right. This is also under Companies Act. So it is possible that both doesn't exercise their rights and the acquirer owns 99.9% stake and it becomes a private / public unlisted company.

3) Nonetheless stock may be delisted if less than 10% float or less than 500 (?) shareholders. This is under the Listing manual and different from Companies Act. So if acquirer owns 91% of company, it may not trigger CA but stock will get delisted. So depends whether investors got appetite for unlisted public companies.

To add-on,

1) I agree that it is no penalty to wait till unconditional, unless you want to get out earlier to sell in the market, with a small brokerage fee, and an opportunity cost of higher offer. No point to rush while conditional.

2) In the GO announcement, the company has stated to exercise the right, thus it is not an issue here. The statement is valid in general.

3) This is a more likely scenario in this case, IMO

yes I was actually stating in general, not specific for CMH, so that forumers can have a better idea of the mechanics and apply everywhere

[cfa]

Thanks to all buddies for sharing . I really learn something which are new to me .

[CityFarmer]

The offeror’s intentions is normally clearly stated in offer doc, or shareholder circular for GO. Here is the intentions, for fellow VB reference.

"The Offeror does not intend to maintain the present listing status of the Company.
Accordingly, the Offeror, if and when entitled, intends to exercise its rights of compulsory
acquisition under Section 215(1) of the Companies Act and does not intend to take any
step for the public float to be restored and/or for any trading suspension of the Shares by
the SGX-ST to be lifted in the event that, inter alia, less than 10% of the total number of
issued Shares (excluding any Shares held in treasury) are held in public hands. In addition,
the Offeror also reserves the right to seek a voluntary delisting of the Company from the
SGX-ST pursuant to Rules 1307 and 1309 of the Listing Manual.”

(vested, and waiting for unconditional to send out the acceptance)

[valuebuddies]

Vested thru SCB, verified from them that i should give instruction by 21 June, otherwise if GO becomes unconditional, I may then choose to sell thru open market. SCB told me that it is not stated in GO documents about selling of shares to the offeror within 14 days after GO becomes unconditional. I questioned regarding the take over code but SCB could not advise further. Any one could advise on how to deal with SCB?

[specuvestor]

^^ In my experience brokers are not knowledgeable about technical details and even if they are they will not want to be made liable for your actions by giving advise. Most of the time they will tell you their standard process and admin.

[specuvestor]

With ref to my post #1043, I was informed by another VB that conditional or unconditional by SAME offeror is entitled to revision of price. One is not entitled to revision only on competing offers but there are also provision for withdrawal of acceptance when offer is unconditional.

I stand corrected and appreciate if there are other clarifications by VBs on this

Unconditional you get paid fast when u tender but you wont get reimbursed for higher offer later; conditional you get paid with everyone unless it turns unconditional or u sell at market.

[MINX]

With ref to my post #1043, I was informed by another VB that conditional or unconditional by SAME offeror is entitled to revision of price. One is not entitled to revision only on competing offers but there are also provision for withdrawal of acceptance when offer is unconditional.

I stand corrected and appreciate if there are other clarifications by VBs on this

I don't know about you guys, but I'm totally confused now following all the arguments 

[marandaz]

Well a bit of anti-climax...

As of today, the VALID SHARE acceptance has breached the 90% threshold, BUT

The GO is still "CONDITIONAL" because the MAXIMUM POTENTIAL acceptance is still 89.27%. 

If my comprehension did not fail me, We need to either wait for the offer to close if no more acceptance is coming in or that the MAXIMUM POTENTIAL acceptance reaches 90%