LMA International

[Jacmar]

why is it still trading below the distribution value in the market?

The deal is not done yet.
So, there is a discount to distribution value since there is still an inherent risk that the deal may not go through.

i understand that there are risks.. but typically market usually trade much close to the price.. say 0.60 to 0.62.. isnt it?

This is not a GO. It's an offer to buy out the assets of the company...meaning the company still remains with cash and no assets. the cost of returning money and dismantling of the company through delisting (lawyer fees etc)and mayber paying off some staff retrenchment etc is required, hence you won't get the full 62cents.

[cif5000]

This is not a GO. It's an offer to buy out the assets of the company...meaning the company still remains with cash and no assets. the cost of returning money and dismantling of the company through delisting (lawyer fees etc)and mayber paying off some staff retrenchment etc is required, hence you won't get the full 62cents.

The 62cts is the management "best estimate" of the liquidating distributions. That's after factoring in the proceeds from selling the business, all liabilities, existing cash, and admin cost for liquidation. The NTA per share post-disposal is illustrated as 68.6cts.

Other than the risk of the deal not going through, we also have to consider the duration of the whole process. At 58.5ct, the profit is about 6%. Depending on the timing of the distributions, the annualized return can vary substantially.

[hongonn]

This is not a GO. It's an offer to buy out the assets of the company...meaning the company still remains with cash and no assets. the cost of returning money and dismantling of the company through delisting (lawyer fees etc)and mayber paying off some staff retrenchment etc is required, hence you won't get the full 62cents.

Huh i haven't heard of this before. What if the management want to retrench themselves and get themselves a private jet as retrenchment package. Or maybe a space tour. We have to foot the bill?

Sorry i am pretty new about this.

[Jacmar]

This is not a GO. It's an offer to buy out the assets of the company...meaning the company still remains with cash and no assets. the cost of returning money and dismantling of the company through delisting (lawyer fees etc)and mayber paying off some staff retrenchment etc is required, hence you won't get the full 62cents.

Huh i haven't heard of this before. What if the management want to retrench themselves and get themselves a private jet as retrenchment package. Or maybe a space tour. We have to foot the bill?

Sorry i am pretty new about this.

well this is where the independent directors and the board comes in. it has to be done within reasonable limits

[lanoitar]

i understand that there are risks.. but typically market usually trade much close to the price.. say 0.60 to 0.62.. isnt it?

Those arbitrageurs also not gong kia... they must look at the downside also mah. Say they listen to u buy at 60c... if go thru win 2c, otherwise lose 20c:

p x 2c - (1 - p) x 20c = 0
p = 90.9%

They'll breakeven if probability of deal going thru is about 91%. If less than that, they'll likely lose 33%!

This kind of risk arbitrage pai-tan lah.... if win, win small small... if lose, lose big big. The spread is big for a reason, tio bo?

[Jacmar]

i understand that there are risks.. but typically market usually trade much close to the price.. say 0.60 to 0.62.. isnt it?

Those arbitrageurs also not gong kia... they must look at the downside also mah. Say they listen to u buy at 60c... if go thru win 2c, otherwise lose 20c:

p x 2c - (1 - p) x 20c = 0
p = 90.9%

They'll breakeven if probability of deal going thru is about 91%. If less than that, they'll likely lose 33%!

This kind of risk arbitrage pai-tan lah.... if win, win small small... if lose, lose big big. The spread is big for a reason, tio bo?

there is another angle to this. if you read the agreement there is a clause open for a higher bid and in which case LMA board has to offer to the hihger bidder. So it is not just the downside but could also be upside too. i hope they now actively go out and sort for a higher bid. people like medtronics, J&J, Olympus and many others in the medical equip field would be interested and start a bidding war....mini APB side show

[Blackjack]

Just came back from a slow leisurely stroll along Orchard Road... enjoying myself a bit before I start my engine moving again next week

One of my smallest holding. Wanted to accumulate more when the storm attacks, since now dark cloud is gathering

Offer price $0.62 is at PE 17x, doesn't seem very attractive why the management so eager to sell.

How come lately so many good stocks get acquisited, or get privatized? There are really not much good stocks left in the SGX. At least not those terribly fully valued.

That's why we never wait for the 'perfect' time... there is no perfect time. Well there's always a price for anything. Either someone comes along to offer a price or we sit there waiting and hoping we have made a right choice... but we'll never know and we we'll be tested everyday?

very 'sian", another potential multi-bagger bites the dust. i am going to vote against the deal at the EGM. Where can you find a small cap comapny in sgx that has a global foot print with patented technology and in an industry that is recession proof in this kind of global economic slowdown!! The buyer is not paying for future growth of the company. Reject the offer!

Or we wait out and see if anyone else comes along? It is a good growth stock undoubtedly but not many recognise its value. Probably can guess it via the number of posts on this thread. Why else would this opportunity come about for Teleflex?

[newyorkcityboy]

As a shareholder of LMA, I think this offer undervalues the company. Whilst it may have "single" product risk, it has built up a strong global brand name for its products such as LMA Supreme. Anesthetics whom I know can attest to the product quality. The company is also starting to make inroads into high growth emerging markets such as China and Brazil. The inflection in earnings for this turnaround play has started and the fruits have not been reaped yet. So net net, there could be too much left on the table. I would be particularly interested to read the IFA's recommendation, but I hope it won't be a cop out report.

I am more fortunate to have own LMA in recent months, but I know of many who rode the down leg under previous management. These guys will not agree to the asset buyout by Teleflex at these price.

[d.o.g.]

Logically speaking there were always only 2 outcomes for LMA:

1. Growth into a giant

This would take many years and involve acquisitions funded by rights issues - there's only so much money you can borrow. If they chose to merge, and the targets were much larger, the LMA shareholders would lose control - the acquired company's shareholders would be the one in charge. So, hard to pull off. If they do it, jackpot.

2. Acquisition by a giant

This was far more likely. The only question was price. Lots of big companies around with related businesses into which they could "slot" LMA. If it happens, jackpot.

So you see, under either scenario a shareholder would do well. The only unknown was time. A shareholder who was willing to wait forever would be at a big advantage here, assuming they did not buy in at too high a price.

As for those who bought into LMA at/near the IPO, they went into it with their eyes open. It was plainly stated in the IPO prospectus that they had no intention to ever pay dividends, etc. A prudent investor would have waited until the turnaround (and initiation of dividends) under the new CEO before deciding to buy in - and would now be well rewarded.

[Contrarian]

Windfall! My biggest holding

http://info.sgx.com/webcoranncatth.nsf/V...9007F8511/$file/Teleflex_agrees_to_buy_LMA_assets_at_50_percent_premium_to_market_share_price.pdf?openelement

One of my smallest holding. Wanted to accumulate more when the storm attacks, since now dark cloud is gathering

Offer price $0.62 is at PE 17x, doesn't seem very attractive why the management so eager to sell.

How come lately so many good stocks get acquisited, or get privatized? There are really not much good stocks left in the SGX. At least not those terribly fully valued.

Maybe they got large bets of options in the $$$.