Silverlake Axis

[weii]

Alternatively, shareholders may choose to receive a combination of S$0.30 per share in cash, together with one new redeemable preference share (RPS) in the capital of the offeror, E2I, for each offer share.

New offeror RPSes are not and will not be listed on any securities exchange, and do not carry any voting or dividend rights. They will be mandatorily redeemed five years from their issuance at the redemption amount of S$0.18 apiece...."

For shareholders to receive a combination of S$0.30 per share in cash, together with one new redeemable preference share (RPS) in the capital of the offeror, E2I, for each offer share, a KYC Particulars Form will need to be completed and certified to be correct by qualified certifiers. Any valuebuddies members willing to help to do certification?

Suitable certifiers comprise any one of the following:
• Registered Lawyer;
• Notary Public or Commissioner of Oaths;
• Solicitor;
• Certified Public Accountant or Chartered Accountant;
• Judicial Officer, i.e. Judge, Magistrate, Justice of the Peace;
• Police/Customs/Consular Officer;
• Qualified Chartered Secretary; or
• Director of an entity carrying on a financial services business which is regulated and operates in a FATF equivalent jurisdiction.
The certifier must:
• state that the document is a true copy of the original; and
• sign and date the document being certified, stating his/her name, position/capacity, address and email address.
Certification must be done as of a date not more than 3 months prior to the date of this KYC Particulars Form.

[ghchua]

Hi weii,

Are you a foreigner working here on a work pass or passport holder? Otherwise, you do not need to certify anything in the KYC Particulars Form.

[weii]

Thanks for informing that Singaporeans need not submit certified forms. Only need to fill up KYC Particulars Form and submit it together with a copy of NRIC.

[weijian]

SLA have lost their free float. To recap, their VGO has been deemed "fair and reasonable" by the IFA ~2 weeks ago. The 2nd requirement to get delisted is to get 75% acceptances.

To recap, % of shareholders not acting in concert = 100 - 74.01 = 25.99%
75% of acceptances = 0.75*25.99% = 19.5%
Offerer/concerted parties will therefore require 74.01% + 19.5% = 93.51%.

As of end 7th Oct 2024, it has 90.53% and will require another 3%, or ~30% of existing free float to get past the hurdle to delist the company (as in its intention). And it has 2 weeks to do so.

DEALINGS DISCLOSURE, LEVEL OF ACCEPTANCES, LOSS OF FREE FLOAT, AND NON-ASSENTING SHAREHOLDERS' RIGHTS UNDER SECTION 215(3) OF THE COMPANIES ACT

Resultant total percentage of the total number of issued Shares owned or controlled by the Offeror and its Concert Parties: 90.53%

As at 26 August 2024, being the Offer Announcement Date, the Offeror and its Concert Parties collectively owned or controlled an aggregate of 1,863,440,968 Shares, representing approximately 74.10% of the total number of issued Shares.

https://links.sgx.com/FileOpen/Dealings_...eID=821197

[weijian]

Finally had a chance to review the IFA's report.

To recap, the offer was done by a newly setup company (100% owned by Chairman Goh's vehicle) with either (a) 36cents cash or (b) 30cents cash + 5year RPS of the newly setup company to be redeemed at 18cents.

IFA methodology Used 2 statistics (mean and median), 2 valuation methodologies (P/E and EV/EBITDA) and 2 comparisons (comparable software services companies still listed in India/US/Japan/Europe and comparable takeover precedents) to generate total of 8 numbers (2x2x2). The upper bound used the biggest number (41cents) and the lower bound (34cents) was calculated from the average of the remaining numbers (after excluding the outliers probably using box plot technique). As 36cents was within the 34-41cents range, IFA deemed offer to be fair and reasonable.

Exploring the alternate offer (30cents cash + 18cents RPS to be redeemed in 5 years time): (A) The RPS have no voting/dividend rights and just rank above ordinary shares (which is 100% owned by Goh). (B) Essentially OPMIs are trading 6cents cash for 18cents in 5 years time, or 40% return per year! This looks "too good" (B) Even using very generous 12.4% discount rate, the PV of this 6cents is actually 10cents. So in value investing parlour, one is paying 60cents for a dollar's worth in exchange for a 5 year illiquidity premium.

Behavior of SAL share price post announcement (A) Arbs paid ~5% premium to bet on an increase in price. It didn't materialize and so share price dropped back to 36cents. (B) The drop to 36cents suggest that Mr Market assigns almost zero value for the rights to participate in this RPS. Inefficient market? To good to be true?

P.S. I hope VB.com and SAL OPMIs who have decided to buy into this, are still around before the turn of the decade, to update everyone.

[owq]

Finally had a chance to review the IFA's report.

To recap, the offer was done by a newly setup company (100% owned by Chairman Goh's vehicle) with either (a) 36cents cash or (b) 30cents cash + 5year RPS of the newly setup company to be redeemed at 18cents.

IFA methodology Used 2 statistics (mean and median), 2 valuation methodologies (P/E and EV/EBITDA) and 2 comparisons (comparable software services companies still listed in India/US/Japan/Europe and comparable takeover precedents) to generate total of 8 numbers (2x2x2). The upper bound used the biggest number (41cents) and the lower bound (34cents) was calculated from the average of the remaining numbers (after excluding the outliers probably using box plot technique). As 36cents was within the 34-41cents range, IFA deemed offer to be fair and reasonable.

Exploring the alternate offer (30cents cash + 18cents RPS to be redeemed in 5 years time): (A) The RPS have no voting/dividend rights and just rank above ordinary shares (which is 100% owned by Goh). (B) Essentially OPMIs are trading 6cents cash for 18cents in 5 years time, or 40% return per year! This looks "too good" (B) Even using very generous 12.4% discount rate, the PV of this 6cents is actually 10cents. So in value investing parlour, one is paying 60cents for a dollar's worth in exchange for a 5 year illiquidity premium.

Behavior of SAL share price post announcement (A) Arbs paid ~5% premium to bet on an increase in price. It didn't materialize and so share price dropped back to 36cents. (B) The drop to 36cents suggest that Mr Market assigns almost zero value for the rights to participate in this RPS. Inefficient market? To good to be true?

P.S. I hope VB.com and SAL OPMIs who have decided to buy into this, are still around before the turn of the decade, to update everyone.

Have been a long-time OPMI and decided to sell at 37 cents, as the RPS is attractive in return but seems too risky for me. The rights are limited and there is big uncertainty. I would rather invest the 7 cents back into normal equity and get back 10 cents over 5 years using a general equity return of 8%. I think it's now at 36 cents because there is no longer any new buyer who is interested in doing the RPS. I concur with weijian that I hope RPS holders would update us on the outcome after 5 years

[weii]

Finally had a chance to review the IFA's report.

To recap, the offer was done by a newly setup company (100% owned by Chairman Goh's vehicle) with either (a) 36cents cash or (b) 30cents cash + 5year RPS of the newly setup company to be redeemed at 18cents.

IFA methodology Used 2 statistics (mean and median), 2 valuation methodologies (P/E and EV/EBITDA) and 2 comparisons (comparable software services companies still listed in India/US/Japan/Europe and comparable takeover precedents) to generate total of 8 numbers (2x2x2). The upper bound used the biggest number (41cents) and the lower bound (34cents) was calculated from the average of the remaining numbers (after excluding the outliers probably using box plot technique). As 36cents was within the 34-41cents range, IFA deemed offer to be fair and reasonable.

Exploring the alternate offer (30cents cash + 18cents RPS to be redeemed in 5 years time): (A) The RPS have no voting/dividend rights and just rank above ordinary shares (which is 100% owned by Goh). (B) Essentially OPMIs are trading 6cents cash for 18cents in 5 years time, or 40% return per year! This looks "too good" (B) Even using very generous 12.4% discount rate, the PV of this 6cents is actually 10cents. So in value investing parlour, one is paying 60cents for a dollar's worth in exchange for a 5 year illiquidity premium.

Behavior of SAL share price post announcement (A) Arbs paid ~5% premium to bet on an increase in price. It didn't materialize and so share price dropped back to 36cents. (B) The drop to 36cents suggest that Mr Market assigns almost zero value for the rights to participate in this RPS. Inefficient market? To good to be true?

P.S. I hope VB.com and SAL OPMIs who have decided to buy into this, are still around before the turn of the decade, to update everyone.

Have been a long-time OPMI and decided to sell at 37 cents, as the RPS is attractive in return but seems too risky for me. The rights are limited and there is big uncertainty. I would rather invest the 7 cents back into normal equity and get back 10 cents over 5 years using a general equity return of 8%. I think it's now at 36 cents because there is no longer any new buyer who is interested in doing the RPS. I concur with weijian that I hope RPS holders would update us on the outcome after 5 years

[weii]

Finally had a chance to review the IFA's report.

To recap, the offer was done by a newly setup company (100% owned by Chairman Goh's vehicle) with either (a) 36cents cash or (b) 30cents cash + 5year RPS of the newly setup company to be redeemed at 18cents.

IFA methodology Used 2 statistics (mean and median), 2 valuation methodologies (P/E and EV/EBITDA) and 2 comparisons (comparable software services companies still listed in India/US/Japan/Europe and comparable takeover precedents) to generate total of 8 numbers (2x2x2). The upper bound used the biggest number (41cents) and the lower bound (34cents) was calculated from the average of the remaining numbers (after excluding the outliers probably using box plot technique). As 36cents was within the 34-41cents range, IFA deemed offer to be fair and reasonable.

Exploring the alternate offer (30cents cash + 18cents RPS to be redeemed in 5 years time): (A) The RPS have no voting/dividend rights and just rank above ordinary shares (which is 100% owned by Goh). (B) Essentially OPMIs are trading 6cents cash for 18cents in 5 years time, or 40% return per year! This looks "too good" (B) Even using very generous 12.4% discount rate, the PV of this 6cents is actually 10cents. So in value investing parlour, one is paying 60cents for a dollar's worth in exchange for a 5 year illiquidity premium.

Behavior of SAL share price post announcement (A) Arbs paid ~5% premium to bet on an increase in price. It didn't materialize and so share price dropped back to 36cents. (B) The drop to 36cents suggest that Mr Market assigns almost zero value for the rights to participate in this RPS. Inefficient market? To good to be true?

P.S. I hope VB.com and SAL OPMIs who have decided to buy into this, are still around before the turn of the decade, to update everyone.

Have been a long-time OPMI and decided to sell at 37 cents, as the RPS is attractive in return but seems too risky for me. The rights are limited and there is big uncertainty. I would rather invest the 7 cents back into normal equity and get back 10 cents over 5 years using a general equity return of 8%. I think it's now at 36 cents because there is no longer any new buyer who is interested in doing the RPS. I concur with weijian that I hope RPS holders would update us on the outcome after 5 years

I wonder why minority shareholders of Silverlake should sell their shares in the open market. Silverlake is still not able to delist the company at this moment and it is likely to be forced to restore free float and stay listed on SGX. As it will not cost Silverlake a lot of money to buy over this small group of dissenting shareholders it is likely to offer $0.48 or higher in 5 years time.

[weii]

I wonder why minority shareholders of Silverlake should sell their shares in the open market. Silverlake is still not able to delist the company at this moment and it is likely to be forced to restore free float and stay listed on SGX. As it will not cost Silverlake a lot of money to buy over this small group of dissenting shareholders it is likely to offer $0.48 or higher in 5 years time.

[ghchua]

Hi weii,

The offeror cannot buy at more than 36c per share (since they said that the offer price is final). Based on the trading price of Silverlake for the past few days, it had been more than 36c. Therefore, those who bought Silverlake shares at above offer price are likely to accept the combination offer of cash plus RPS. Which further reduces the free float to move it towards the 75% acceptance level for delisting.