15-06-2024, 03:36 PM (This post was last modified: 17-06-2024, 12:53 PM by weijian.)
@ghchua,
If we look at the historical offers by OCBC, all of them came in a space of 2-3years before the last one in 2006. VB GG once documented it here: https://www.valuebuddies.com/editpost.php?pid=29911
After those consecutive offers in just as many years, can't blame minorities for thinking that the future was bright. On hindsight, minorities were treated to a horror show as 1.5x EV became 0.5x EV in the next 18 years. Of course, past performance is not an indication of the future and so anyone's guess how this 0.7x EV price will turn out in the future.
As usual, minorities don't have a lot of 10years (or 18years). They were lucky that OPMI Hero Ong turned up for national duty. But it would be luckier for the OPMI who had learnt "How to Make Millions before Grandpa Dies". At least the mental accounting can be easier denoted as "zero".
15-06-2024, 03:41 PM (This post was last modified: 15-06-2024, 03:41 PM by weijian.)
For the benefit of all (and especially ghchua who will probably be bombarded by a lot of questions), I have added the graphical flow chart for a company to be delisted based on the latest listing rules.
Acknowledgments to either ghchua or dreamybear (can't remember the exact person who first shared it in the BP thread previously)
(15-06-2024, 03:36 PM)weijian Wrote: After those consecutive offers in just as many years, can't blame minorities for thinking that the future is bright. On hindsight, minorities were treated to a horror show as 1.5x EV became 0.5x EV in the next 18 years. Of course, past performance is not an indication of the future and so anyone's guess how this 0.7x EV price will turn out in the future.
Hi weijian,
I have no crystal ball to predict how the market will rate GEH going forward if it continues to be listed after the offer closes. But what is quite certain is that GEH had came out with a better dividend policy since last year. So, are you going to forgo a 4+%pa dividend yielder? Granted that the market had rated down GEH in terms of EV multiples since the last offer, but the relevant question should be, will GEH's EV continue to grow going forward, as it had been since the last offer?
Focus on the fundamentals of the company, rather than what the stock market is doing.
I have no crystal ball to predict how the market will rate GEH going forward if it continues to be listed after the offer closes. But what is quite certain is that GEH had came out with a better dividend policy since last year. So, are you going to forgo a 4+%pa dividend yielder? Granted that the market had rated down GEH in terms of EV multiples since the last offer, but the relevant question should be, will GEH's EV continue to grow going forward, as it had been since the last offer?
Focus on the fundamentals of the company, rather than what the stock market is doing.
hi ghchua,
I don't think fundamentals and "what the stock market is doing" are exclusive in nature.
Focusing exclusively on fundamentals is just as damaging as focusing exclusively on what the stock market is doing. It is clear that there is no wisdom when something intelligent has been bought to extremes.
A 4%pa dividend yielder is cold comfort if EV multiples re-rate. Example, if the EV multiple reduces by 0.1x over 3 years, total dividends received of 12% is barely enough to cover it. One could also argue that EV will probably grow, which is true. Again, when EV multiples re-rate, most of that growth is just accounting value - can see, cannot touch. Recently SIAS asked about GEH's TSR (total shareholder returns) and the answer from Mgt makes it very clear why OPMI Hero Ong was made in the 1st place.
As a matter of fact, the appearance of any "activist" in the SGX market is simply a red flag on a company. While activists had been pretty successful in foreign markets by forcing changes for a better future, but the controlling stakes that is common in Asian markets make such "forced change" implausible.
19-06-2024, 09:39 AM (This post was last modified: 19-06-2024, 09:42 AM by weijian.)
With the share price going below/at offer price, OCBC is able to start mopping up shares on the open market, spending ~7mil. Inclusive of the acceptances it received as of 18th June, Offerer and and concerted parties now own 89.14%, and there is just 0.86% left to acquire for suspension to happen.
Have arbitragers started to give up?
DEALINGS DISCLOSURE LEVEL OF ACCEPTANCES OF OFFER
5,000 Shares at SGD25.56
15,000 Shares at SGD25.57
28,400 Shares at SGD25.58
66,800 Shares at SGD25.59
157,000 Shares at SGD25.60
Total: 272,200 Shares 0.06%
20-06-2024, 11:20 AM (This post was last modified: 20-06-2024, 11:20 AM by weijian.)
With the share price going below/at offer price, OCBC is able to start mopping up shares on the open market, spending ~12.2mil. Inclusive of the acceptances it received as of 19th June, Offerer and and concerted parties now own 89.34%, and there is just 0.66% left to acquire for suspension to happen.
Yesterday, 10:40 AM (This post was last modified: Yesterday, 10:43 AM by weijian.)
GEH has mostly been trading at above offer price and so OCBC is scarcely able to buy on the open market. However, GEH shareholders have been sending in their acceptances and as of 21st June close, it is only 0.08% from suspension.
It is inevitable that GEH will be suspended in the near future. But it will not be delisted due to the "not fair but reasonable" offer. So post suspension, GEH is obliged to restore the free float and to recap, the free float was 1.56% (exclusive of 0.23% owned by concerted parties) as OCBC already owned 88.44% before tabling its offer.
Will OCBC or GEH do anything to restore the free float via share placement? Restoring free float will mean that OCBC has to reduce its % holding of GEH either via its own share placement to 3rd parties OR GEH doing one to expand the total share count.
Or will there be a "fair and reasonable" offer down the road?
DEALINGS DISCLOSURE LEVEL OF ACCEPTANCES OF OFFER
Inclusive of the acceptances it received as of 21st June, Offerer and and concerted parties now own 89.92%, and there is just 0.08% left to acquire for suspension to happen.
(Yesterday, 10:40 AM)weijian Wrote: GEH has mostly been trading at above offer price and so OCBC is scarcely able to buy on the open market. However, GEH shareholders have been sending in their acceptances and as of 21st June close, it is only 0.08% from suspension.
It is inevitable that GEH will be suspended in the near future. But it will not be delisted due to the "not fair but reasonable" offer. So post suspension, GEH is obliged to restore the free float and to recap, the free float was 1.56% (exclusive of 0.23% owned by concerted parties) as OCBC already owned 88.44% before tabling its offer.
Will OCBC or GEH do anything to restore the free float via share placement? Restoring free float will mean that OCBC has to reduce its % holding of GEH either via its own share placement to 3rd parties OR GEH doing one to expand the total share count.
Or will there be a "fair and reasonable" offer down the road?
DEALINGS DISCLOSURE LEVEL OF ACCEPTANCES OF OFFER
Inclusive of the acceptances it received as of 21st June, Offerer and and concerted parties now own 89.92%, and there is just 0.08% left to acquire for suspension to happen.
The offeror has stated in its offer document that it does not intend to restore the free float to 10% and will seek a voluntary delisting. I believe the statement is binding to the offeror as much as its offer being final.
Granted that the offeror (i.e. OCBC) had stated on record their intention not to restore the free float of GEH, it doesn't mean that GEH board cannot do a placement after the offer closes to restore the free float. Its two different things altogether. The GEH board has a duty to all shareholders of GEH, and not only OCBC.
Doing a small placement to restore free float does not need shareholders' approval, unless OCBC blocked the share issue mandate at AGMs. But at the last AGM, the share issue mandate had been approved. So the question we should ask if GEH is suspended due to insufficient free float is - Will GEH board play ball?
What is the point of being the largest shareholders especially when it crossed 75% with no large shareholder in sight and not able to direct and make decision?
What is the point of buying additional interest then sell additional share?
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At least the mental accounting can be easier denoted as "zero".
