Hotel Properties

[greengiraffe]

$4-a-share buyout offer for HPL 'fair and reasonable'

Independent adviser CIMB: Premium higher or in line with other takeovers
Published on May 21, 2014 1:32 AM

Mr Ong and Wheelock raised their offer from $3.50 a share to $4 a share last Wednesday, valuing the hotel firm at $2.07 billion. -- BT FILE PHOTO

By Cheryl Ong

A BUYOUT offer for Hotel Properties (HPL) at $4 a share has been deemed "fair and reasonable" by independent financial adviser CIMB Bank.

The adviser to HPL's independent directors compared the premium of the offer price over previously transacted prices with those for earlier takeovers for 35 companies.

It found that the premium was either higher than, or in line with, these earlier transactions.

HPL's valuation ratios were also higher than those of preceding transactions by seven of its peers in the property market, such as SC Global Developments and Singapore Land, said CIMB in a circular sent to shareholders Monday.

The findings said the offer lodged by 68 Holdings, the consortium led by HPL's managing director Ong Beng Seng and Wheelock Properties, "does not change the management control of the company". This means that the bid will not result in any change in control of the firm.

Mr Ong and Wheelock raised their offer to buy out the hotel firm from $3.50 a share to $4 a share last Wednesday, valuing the hotel firm at $2.07 billion.

They started the takeover exercise last month after they bought about 41.91 per cent of HPL's shares for $3.50, triggering a "mandatory conditional takeover" for all the other shares they do not own in the firm at the same price.

HPL's independent directors concurred with CIMB's advice, noting that some investors could consider selling shares on the open market, or accept the $4 offer.

These include shareholders who could be uncertain over HPL's prospects following the deal, or those who wish to realise their investments now.

Shareholders who are otherwise confident of the firm's prospects under 68 Holdings' control may consider retaining their shares, the independent directors said, but added that its shares have not traded at, or above, $4 in the three-year period before the buyout campaign started last month.

CIMB also pointed out that the average daily trading volume of the hotel firm "has generally declined in recent years".

It fell from a three-year average daily trading volume of 229,526 shares (or 0.17 per cent of HPL's free float) to about 97,429 (0.07 per cent) over the one-month period before the takeover bid.

The higher offer price is at a 4.17 per cent premium over HPL's last traded price of $3.84 last Wednesday, ahead of the price revision. It also represents a 20.3 per cent discount to the firm's revalued net asset value per share of $5.02 as at March 31, based on valuations obtained from firms such as CBRE, Jones Lang LaSalle and Cushman and Wakefield.

Ahead of its raised offer, investors holding 692,000 - or 0.13 per cent - of HPL's issued shares had accepted the first offer of $3.50.

HPL shareholders who tender their shares will not have last year's full-year dividend of eight cents deducted from the $4 offer price, 68 Holdings said earlier.

HPL shares closed one cent higher at $4.04 yesterday.

ocheryl@sph.com.sg

[investor2014]

today staying above offer price....

[investor2014]

today staying above offer price....

another day closing above offer price.

[greengiraffe]

unlike the trading pattern from the initial offer @ 3.50, this holding pattern is telling you that even speculators are matched with non believers (at least in the short term).

Anyway, OBS/WP/Fu need to keep HPL listed in order to get attractively priced financing for a long duration mammoth redevelopment.

Long process to extract more value... any investors must have stamina for the marathon.

today staying above offer price....

another day closing above offer price.

[investor2014]

unlike the trading pattern from the initial offer @ 3.50, this holding pattern is telling you that even speculators are matched with non believers (at least in the short term).

Anyway, OBS/WP/Fu need to keep HPL listed in order to get attractively priced financing for a long duration mammoth redevelopment.

Long process to extract more value... any investors must have stamina for the marathon.

today staying above offer price....

another day closing above offer price.

yes agree with you. this round the price didnt "run" away from the offer price. instead its in a holding pattern like you said.

holding steadily above $4, but also not going much higher.

i guess patience and stamina would be important

[investor2014]

today again managed to close above offer price.

[investor2014]

unlike the trading pattern from the initial offer @ 3.50, this holding pattern is telling you that even speculators are matched with non believers (at least in the short term).

Anyway, OBS/WP/Fu need to keep HPL listed in order to get attractively priced financing for a long duration mammoth redevelopment.

Long process to extract more value... any investors must have stamina for the marathon.

Explaining the deal, 68 Holdings said: "OBS, as the co-founder of HPL, David Ban and Wheelock Singapore have been long-term shareholders of HPL and they share a common vision and strategy for HPL. They have therefore decided to consolidate their shareholdings in HPL so as to be in a position to cooperate and implement their shared objectives for HPL and to enhance value over time."


====takes time to extract and enhance value

[investor2014]

unlike the trading pattern from the initial offer @ 3.50, this holding pattern is telling you that even speculators are matched with non believers (at least in the short term).

Anyway, OBS/WP/Fu need to keep HPL listed in order to get attractively priced financing for a long duration mammoth redevelopment.

Long process to extract more value... any investors must have stamina for the marathon.

Explaining the deal, 68 Holdings said: "OBS, as the co-founder of HPL, David Ban and Wheelock Singapore have been long-term shareholders of HPL and they share a common vision and strategy for HPL. They have therefore decided to consolidate their shareholdings in HPL so as to be in a position to cooperate and implement their shared objectives for HPL and to enhance value over time."


====takes time to extract and enhance value

looks like have to be patience for mr ong and wheelock to implement their share objectives for hpl.

[greengiraffe]

unlike the trading pattern from the initial offer @ 3.50, this holding pattern is telling you that even speculators are matched with non believers (at least in the short term).

Anyway, OBS/WP/Fu need to keep HPL listed in order to get attractively priced financing for a long duration mammoth redevelopment.

Long process to extract more value... any investors must have stamina for the marathon.

Explaining the deal, 68 Holdings said: "OBS, as the co-founder of HPL, David Ban and Wheelock Singapore have been long-term shareholders of HPL and they share a common vision and strategy for HPL. They have therefore decided to consolidate their shareholdings in HPL so as to be in a position to cooperate and implement their shared objectives for HPL and to enhance value over time."


====takes time to extract and enhance value

looks like have to be patience for mr ong and wheelock to implement their share objectives for hpl.

Told you liao, real business is tough and a long drawn process. Analysts desktop valuations while compelling will take time for real businessmen to execute their strategies and eventually extract the value should their risk taking pays off...

Its always easy to be an equity investor and harder to be a real businessmen. However, if we can be an more intelligent equity investor and start thinking like a businessman, then our chances of making supernormal profits over a sustained period will be a lot higher.

GG

[investor2014]

unlike the trading pattern from the initial offer @ 3.50, this holding pattern is telling you that even speculators are matched with non believers (at least in the short term).

Anyway, OBS/WP/Fu need to keep HPL listed in order to get attractively priced financing for a long duration mammoth redevelopment.

Long process to extract more value... any investors must have stamina for the marathon.

Explaining the deal, 68 Holdings said: "OBS, as the co-founder of HPL, David Ban and Wheelock Singapore have been long-term shareholders of HPL and they share a common vision and strategy for HPL. They have therefore decided to consolidate their shareholdings in HPL so as to be in a position to cooperate and implement their shared objectives for HPL and to enhance value over time."


====takes time to extract and enhance value

looks like have to be patience for mr ong and wheelock to implement their share objectives for hpl.

Told you liao, real business is tough and a long drawn process. Analysts desktop valuations while compelling will take time for real businessmen to execute their strategies and eventually extract the value should their risk taking pays off...

Its always easy to be an equity investor and harder to be a real businessmen. However, if we can be an more intelligent equity investor and start thinking like a businessman, then our chances of making supernormal profits over a sustained period will be a lot higher.

GG

yes, good points!

will wait for them to "cooperate and implement their shared objectives for HPL"