Adampak

[CityFarmer]

To follow-up further on my posting on Some-one clarification on what will happen if he/she reject the offer. I believe to answer that, it is no better than refering a real example.

I follow thru closely on the Portek case. This is what happen. Hope it clarify all doubts

When Acquisition reach >90% holding, it proceed to "Compulsory Acquisition" which mean the following (caption from their formal doc with the link below)

http://info.sgx.com/webcorannc.nsf/Annou...endocument

1.3 Compulsory Acquisition. As we have received valid acceptances and/or acquired Shares in
respect of not less than 90% of the total number of Shares (other than those already held by us, our
related corporations and their respective nominees as at the date of the Offer Document), we are
entitled to and are exercising the right of compulsory acquisition under Section 215(1) of the
Companies Act, to compulsorily acquire, at the Offer Price of S$1.40 per Share and on the same
terms as those offered under the Offer, all the Shares in respect of which valid acceptances have
not been received by us or which we have not acquired as at the date of this Letter.
2. COMPULSORY ACQUISITION UNDER SECTION 215(1) OF THE COMPANIES ACT
2.1 Form 57. According to the records maintained by CDP and/or the Share Registrar, as the case may
be, you have not accepted the Offer or have not accepted the Options Proposal or exercised your
1 All references in this Letter to the total number of Shares shall be to 152,585,960 Shares in issue as at 15 August 2011 as
reflected in the electronic instant information search results from the Accounting and Corporate Regulatory Authority in respect of
the Offeree on 15 August 2011.

[shanrui_91]

To follow-up further on my posting on Some-one clarification on what will happen if he/she reject the offer. I believe to answer that, it is no better than refering a real example.

I follow thru closely on the Portek case. This is what happen. Hope it clarify all doubts

When Acquisition reach >90% holding, it proceed to "Compulsory Acquisition" which mean the following (caption from their formal doc with the link below)

http://info.sgx.com/webcorannc.nsf/Annou...endocument

1.3 Compulsory Acquisition. As we have received valid acceptances and/or acquired Shares in
respect of not less than 90% of the total number of Shares (other than those already held by us, our
related corporations and their respective nominees as at the date of the Offer Document), we are
entitled to and are exercising the right of compulsory acquisition under Section 215(1) of the
Companies Act, to compulsorily acquire, at the Offer Price of S$1.40 per Share and on the same
terms as those offered under the Offer, all the Shares in respect of which valid acceptances have
not been received by us or which we have not acquired as at the date of this Letter.
2. COMPULSORY ACQUISITION UNDER SECTION 215(1) OF THE COMPANIES ACT
2.1 Form 57. According to the records maintained by CDP and/or the Share Registrar, as the case may
be, you have not accepted the Offer or have not accepted the Options Proposal or exercised your
1 All references in this Letter to the total number of Shares shall be to 152,585,960 Shares in issue as at 15 August 2011 as
reflected in the electronic instant information search results from the Accounting and Corporate Regulatory Authority in respect of
the Offeree on 15 August 2011.

i think ck tang shareholder manage to hold out even after 90% target.

"The shares will be delisted on Aug 24. Those who want to accept the offer have up to Aug 14. Others against the offer will remain shareholders of CK Tang, which will become a private company.

They will be entitled to dividends, just as before. One drawback will be that because the shares are not traded on the Singapore Exchange, it will be difficult to find a buyer when one wants to sell. It will also be tricky to fix the price."

is there a difference between delisting and acquisition?
http://www.asiaone.com/Business/News/My%...58885.html

http://www.propertyguru.com.sg/property-...to-succeed

http://news.xin.msn.com/en/business/arti...id=3874991

[CityFarmer]

Yes, the CK Tang case is a doubt for me how they manage to do it. I refer to "CHAPTER 17 CORPORATE FINANCE AND SECURITIES REGULATION". It stated that it is a escape clause for remaining shareholder to do so. It is not a norm, but a exception

17.8.14 This power of compulsory acquisition is presently only available to a company, not to an individual. If an Offeror acquires 90% of the shares of the Offeree company, it may by notice require that the dissenting shareholders sell its shares to it. In calculating the 90% threshold, shares held or acquired by the Offeror, its related corporations and their respective nominees are excluded. The notice must be sent within two months of the satisfaction of the 90% threshold. The shareholder whose shares are thus to be acquired may apply to Court for an order that the Offeror is not entitled to acquire the shares , or specifying different acquisition.

[brattzz]

maybe the remaining shareholders can form a company to hold the shares, so they can nego a better deal privately.

[CityFarmer]

I am not sure whether it is wise to remain as minor shareholder of <5% in a private company. You are at the mercy of major shareholder on dividend payment, company strategic etc. I can assume you are not part of their buddy since you had gone to court with them before.

Just my 2 cts

[dydx]

As this is a voluntary offer, therefore for monority shareholders who don't feel like selling their Adampak shares, they can simply choose not to sell. For those who think Navis' offer at $0.42/share cash (inclusive the declared but unpaid $0.1/share Final dividend for FY11) not good enough or too low, they can also simply choose not to sell.

Of course, we can expect those bigger monority shareholders (i.e. those holding more shares, say 500,000 shares or more) to think even harder before they decide whether to accept Navis' offer or not, or to sell their shares into the open-market, from now till the offer closes in say 2 months. Based on the long 'buy' queue at $0.415 yesterday and today, we must assume Navis is a big participant among those queuing to mop up shares from those loose-footed minority shareholoders who just want to take their gain and money off the table, without knowing or caring what or how much they could lose out should Navis decide to up its offer, or should another suitor emerges later with a better counter offer. I am quite sure most of the monority shareholders who hold more shares would want to wait for and take a close look into the coming IFA opinion and recommendation from the 3 IDs, before making their own decisions whether to accept Navis' offer. For those who own 500,000 shares, an upward revision of the offer by say $0.02/share will mean $10k more in their pocket; for those who own 1,000,000 shares, every upward revision of say $0.01/share will mean $10k more.

I suppose it is conceivable that towards the later part of the offer period, a group of bigger minority shareholders will emerge among those remaining shareholders who are not prepared to just accept Navis' offer at $0.42/share. We will then have a situation that Navis will have to do something if they still want to achieve a >90% acceptance level which will give them the legal right to delist and privatize Adampak through compulsory acquisition of the remaining shares. Navis may have to get someone to talk to these bigger minority shareholders individually or as a group, and may have little choice but to consider raising their offer in order to secure enough acceptances from them to cross the crucial 90% mark.

Navis is a smart private equity investor, and we can assume they must know Adampak is worth quite a lot more than $0.42/share given some time, before hey decide to make a bid for the entire company.

[Nick]

Lim & Tan wrote a short summary on Adampak cash offer:

ADAMPAK

On second thoughts we believe that investors would
be better off taking profit on Adampak anywhere close
to the takeover offer of 42 cents or better and switch
into cheaper comparables such as Armstrong,
Broadway or Cheung Woh. The reasons are as
follows:

1. The key founding management team (5 in total)
who collectively own 52.28% of the company has
decided to call it a day and will be cashing out with
the exception of CEO Chua Cheng Song who has
been given the option of swapping his existing
3.03% stake in Adampak for a 2.4% stake in the
private company (assuming a successful
privatization). Investors just need to think of Jaya
where the majority of the management team
(except one) had accepted Affinity’s takeover
cash offer in 2007 just before the global financial
crisis brought about a debt restructuring exercise
involving Nicky Tan;

2. the offeror does not intend to revise the offer price
except in a competitive situation which seems
unlikely given our believe that Adampak’s major
shareholders must have shopped around for a
while before deciding on the above deal; and

3. at 10x forward PE and 2x price to book, investors
are better off looking else where in the sector
where Armstrong is trading at 9x forward PE and
1.5x price to book, Broadway (7x and 0.9x) and
Cheung Woh (6x and 0.7x).

http://www.remisiers.org/cms_images/rese...dampak.pdf [Report]

(Vested)

[honeyclover]

Pt 3 nt valid.
As mention previously by other forumers, this reduce in earning is temporary. Overall, just see its cashflow, debt, returns. It is superior than other biz mention above besides CEO Chua Cheng Song still remains.

for just $0.42. I will confirm vote No. Its more of a buy price than sell price ...oh well... shun qi zhi ran. (:

[dzwm87]

It is important to realise the opportunity cost in the investment.

No doubt, Adampak may worth more than the offer price and there might be argument that the reduction in earning is temporary but one has to look at the overall picture of the offer deal.

The offer made by Navis is already in effect non-conditional since the minimum acceptance level is at 50% and the irrevocable undertaking already stands above that level (52.28%).

Navis has every intention to privatise the company and looking at the premium offered, I can say it is already quite decent. Unless a minority shareholder can rally the other shareholders, chances are you might be stuck in a private-listed company, with the management slowly playing you to 'death'. Once delisted, I don't think they are also obliged to pay out any rich amount of dividend. All in, you maybe stuck with your investment in Adampak.

As it is, if there are better opportunities around, might as well cash out and average down given the recent bear/sideway momentum in the markets.

[dydx]

To successfully privatise Adampak, Navis first needs to achieve >90% acceptance. For that, Navis must win over those bigger minority shareholders who together hold >10% and are not prepared to sell or find the offer at $0.42/share too low. Failing which, Adampak will remain listed.

Unless Navis doesn't want dividends and can explain to their fund investors why they should forgo dividends from Adampak even though the company can jolly well continue to pay out regular dividends - I very much doubt they could give the reason as "they want to squeeze or play the minority shareholders of Adampak to death"! - there is every reason to believe a listed Adampak will continue to pay out dividends.

If Navis truly wants to privatise Adampak, at a certain point when they know that the remaining shareholders with >10% are not going to accept the offer at $0.42/share, they will have to do something - including start calling up these shareholders to talk, and eventually they may have little choice but to up the offer to appease them to accept. This is entirely possible if there are enough minority shareholders who believe in Adampak's business having a higher intrinsic value, and understand the rules and tricks involved in a takeover battle game, and are patient enough.