Neratel

[KopiKat]

Quite an interesting read...
Extracts from IFA Circular (pg8),

“ Having considered the factors listed in paragraph 6 and subject to the assumptions and qualifications set out elsewhere in this letter and taking into account the conditions prevailing as at the Latest Practicable Date, we are of the opinion that the Offer is fair but not compelling. Accordingly, we advise the Independent Directors that they should recommend that the Shareholders REJECT the Offer.

In rendering our opinion, we have not had regard to any general or specific investment objectives, financial situations, risk profiles, tax positions or particular needs or constraints of any individual Shareholder or any specific group of Shareholders and we neither assume any responsibility for, nor hold ourselves out as advisers to any person other than the Independent Directors.

Our opinion is only based on a financial analysis and does not incorporate any assessmentof commercial, legal, tax, regulatory or other matters. Such factors (including the aforesaid illustrations) are beyond the ambit of our review and do not fall within our terms of reference in connection with the Offer.”

---

Till 14dec 3,631,500 shares aceptance...1% of capital

I bought more at 0.490-0.495.


http://info.sgx.com/webcoranncatth.nsf/V...500366E0C/$file/MGO_Dealings_Announcement_15_December_2012.pdf?openelement

In the same announcement, they also bought 10,000 shares from the open market. At this rate, looks unlikely they'll be able to privatise....

I also got some more @ $0.49 last week. The risk of dropping too much below this price is low.. till offer closes on 8-Jan-13. If they should succeed (very low probability) in privatising, I'll at most lose my transaction costs. The bigger risk of a drop is after the offer closes and the new controlling shareholder decides to cut Dividends.... I'll be keeping my fingers crossed here...

[orang]

Are there any probable reasons to cut dividends?

I just wonder what ways can the new parent company milk Neratel?

[KopiKat]

Are there any probable reasons to cut dividends?

I just wonder what ways can the new parent company milk Neratel?

Let's look at their Intent from their Offer doc,

5.2 Offeror's Intentions for the Company

Following the close of the Offer, the Offeror intends to undertake a strategic and operational review of the organisation, businesses and operations of the Group, and to evaluate various strategic options. It is currently the intention of the Offeror to ensure continuity in the
operations of the Group and to steer the Group to further growth and development.

Save as disclosed above, the Offeror has no present intention to (a) make any major changes to the existing business of the Company, (b) redeploy the fixed assets of the Company, or ( c) discontinue the employment of the employees of the Group. Nonetheless, the Offeror retains the flexibility at any time to consider any options or opportunities which may present themselves, and which the Offeror regards to be in the interests of the Offeror and/or the Group.

The Offeror nonetheless intends to be a long term investor in the Group and does not intend to divest, sell or dispose of the Shares which it acquires pursuant to the Acquisition in the six (6) months following the close or lapse of the Offer.

Sounds like in the short term, there'll be no major changes. But, they also cover themselves with the sentence I highlighted in red.

So, most likely, if the part in red is not activated, then,

1. Replace Eltek Directors with their own people
2. Replace 'unfriendly' IDs eg. those who recommended 'REJECT OFFER'
3. Replace CEO (if not co-operative)

They may also freeze dividend payout, pending the completion of their 'strategic review'. They could also justify that by saying they may need to conserve the cash for biz expansion / diversification (they could also sell / swop some of their other assets to Neratel)....


PS. I have ever invested in a Malaysia company cos' one of their core asset was in banking. Along the way, the banking assets were divested and they acquire a newspaper asset and subsequently, I forgot what it morphed into. Somehow, the share price just kept dropping... I was very new to investing then and didn't know what was happening. But, I learnt a good lesson...

So, ya, I'll be watching closely to see what's their real intention and will definitely act swiftly if need be....

[lonewolf]

The above statement that you highlight is almost always present in any offer information statement during a takeover. I think its more a 'CYA' situation so that the offeror dun get sued somewhere dun the line (though I can't ever recalled this ever happening). So I wont read too much into those thinly-veiled legal mumbo jumbo. Like they said, the proof is in the pudding. So only time will tell what cards these new investor will throw in the future.

Eltek director by default will go because they no longer owe a substantial stake in the company. Replacement of CEO is probably unlikely since he's been doing a good job. As for the 'unfriendly' ID, they were just mouthing what the IFA is recommending; so hardly their fault.

Like you, I will be watching the development closely. My guess is that its probably gonna be business as usual. I doubt there will be a substantial shift to the dividend policy (do they have one??) but we shall see.

[KopiKat]

Offer closed... Let's see what happens next...
Extracts from SGX Annc,

(a) Acceptances of the Offer. As at 5.30 p.m. on 8 January 2013, the Offeror has received valid acceptances amounting to 12,027,439 Offer Shares, representing approximately 3.32% of the total issued Shares
.
.
Accordingly, as at 5.30 p.m. on 8 January 2013, the total number of (A) Shares owned, controlled or agreed to be acquired by the Offeror and parties acting in concert with it, and (B) valid acceptances to the Offer, amount to an aggregate of 193,173,439 Shares, representing approximately 53.38% of the total issued Shares.

[Noob]

wow... 0.55 now.. shd be a no go..

[felixleong]

I never understand why the takeover code mandates a mandatory offer which is usually a waste of time and money; cos in most instance, I dun think the minority shareholder would sell to the offeror; especially when the offered price is at a discount to the 1 month VWAP. IMO the takeover code should be amended for a mandatory offer to be made only when a significant premium (>10%) over the 1 month VWAP. Otherwise who in his right mind would sell to the offeror??

Well, in case the shareholders have poor view of the offeror or the stock price drops below mandatory offer. I suppose many will rush to sell their shares to offerer if that happens.
Or the share is so illiquid that selling to offeror is a better choice than selling it at market price

The mandate is a measure to protect minority shareholders. It ensure similar choice also available to minority shareholders.

The takeover code should not decide on behalf of the shareholders IMO.

Ya the mandate really helps small shareholders a lot, example if the offer price is much higher, you will also get to enjoy the same offer

sometimes if the counter is very illiquid, or the small shareholders have no confidence in the new major shareholder, they might take a lower then market price offer, especially if the stock price ran up a lot liao

[WolfT]

At 0.555 u still get 7.2% dividend, better than reits for a debt free company!
Huat ah!!!
The question now is, will the dividend rise to 4.5cts or 5cts.
If yes, u likely to see the price shoot to at least 60ct

[desmondxyz]

0.565!! New high.....

Dividend surprise under the new BOSS???

[KopiKat]

FY12 Results to be released on 7-Feb (Thu)

Let's see if the new majority shareholder shows their intention for Nera.... ie. maintain / cut / increase Div... of course depending on earnings.

Keep our fingers crossed... For those who're vested.