Adampak

[Some-one]

Thank you all for the information on Adampak. I bought this stock just last year at 0.27 as it comes out in my value stock screening scanner with Vickers. I am sitting on a profit of around 55% with the offer.

[Nick]

It is a little sad to see another cash-cow gone. It has been a good ride ! I wonder will this lead to more interest in the remaining HDD players - Cheung Woh, Armstrong and Broadway.

[CityFarmer]

I opted Armstrong over Adampak previously, so it already proven wrong.

Hope i am not wrong again for Armstrong ;-P

[brattzz]

a bit low, ain't it, for 42cts...especially when pick-up is happening next 2 -3 months...

but then, as long as the senior managements are happy with it.

[Some-one]

I use DCF/CAPM to calculate the intrinsic value of Adampak and it values Adampak at SGD $0.33. The book value is SGD 0.286 so overall, I would say S$0.42 is a good price.

[Drizzt]

sian i didnt collect enough.....

[FFNow]

Sigh... Another dividend machine is probably going soon.
Estimated delisting price? 42cts?

Spot on! yeokiwi, how u came up with the 42cents price? Guess u must be the party buying up Adampak

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"The Offeror does not intend to revise the Offer Price, except that the Offeror reserves the right to do so in a competitive situation." - Hope there's a bidding war like Parkway!

[dydx]

The buyer Navis is a smart private equity investor, so don't expect them to pay too high a price. But Navis' offer has confirmed the high quality of Adampak's business and management, further growth potential, and great value.

The offer at $0.42/share - even though agreeable to the founding/controlling shareholders - is not really a great price! We have to bear in mind that Adampak's 31Dec12 NAV at USD42.2m and NP at USD4.894m had been 'deflated' by (1) asset write-offs and flood-related expenses totalling USD2.04m in its Thai subsidiary, and (2) sub-normal operating profits in the rest of the group due to disruption in the globl supply chain, in Q4 as a direct result of the massive floods in Thailand. We have to also bear in mind that Adampak's 31Dec12 net cash reserve balance of USD17.488m should be adjusted upwards for (1) the expected money from the pending insurance settlement for the USD2.04m loss from floods in Thailand, and (2) a big portion of the USD12.112m Trade Receivables balance which is almost fully financed by Adampak's own equity. My own calculations show Adampak has within the group B/S as much as USD26.0m in total cash and near-cash assets - or approx. $0.12/share - which Navis can strip or monetarise (including loading Adampak with fresh debts after privitisation). So one can argue that Navis is only paying $0.30/share for Adampak's future (per share) operating free cash flow, or approx. 5.7x of Adampak's per share operating FCF of approx. $0.053 in FY10 - while a historical 'high' year in Adampak's operating history, but certainly we should believe there ought to be even better years ahead.

I hope now that the whole world will know that the entire Adampak business is available - as its controlling shareholders are willing to cut a deal for themselves at $0.42 - other suitors may emerge with a better offer. Even short of that, it is always conceivable that in order to achieve a >90% acceptance level to privatise Adampak, Navis may be prepared to sweeten its offer by a few more cents - if it is the only way to get some big minority shareholders to sell.

As usual, in this kind of situation, it is important for shareholders to be informed and be patient!

[julianbream]

I am rather new to this kind of situation and so I called Primepartners Corporate Finance to ask a few questions. They confirmed that since the major shareholders (> 50% shareholding in total) have already given irrevocable undertakings, it is likely that the offer will become an unconditional offer. If so, if I accept the 42 cents, there is no turning back - I will lose my Adampak shares forever - even if the takeover is not successful (i.e., Adampak remains listed). So I think I am going to wait and see. Should we forummers meet and confer to see if we have enough to hold out against the 42 cent offer?

[yeokiwi]

Sigh... Another dividend machine is probably going soon.
Estimated delisting price? 42cts?

Spot on! yeokiwi, how u came up with the 42cents price? Guess u must be the party buying up Adampak

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"The Offeror does not intend to revise the Offer Price, except that the Offeror reserves the right to do so in a competitive situation." - Hope there's a bidding war like Parkway!

I wish I can be that rich..haha..
The FY10 eps is around US3.54cts. I suppose they will valuate adampak at around PE 9-10.
Althought I thought adampak should worth more than that.

Bidding war may be possible since the free cash flow is around S$7.5 to $8 million per year.