Spindex Industries

[Quickbeam]

I am ok with share price volatility. I want to be a long term owner. I am ok selling a stake if it is close to fair value, but not when its unfairly cheap.

[dydx]

I am ok with share price volatility. I want to be a long term owner. I am ok selling a stake if it is close to fair value, but not when its unfairly cheap.

You have just said a lot about the right attitude of a smart investor. Bravo!

[Quickbeam]

If you look at the conditions.. it seems like a low likelihood the deal will go through since the tans are abstaining..

• Share-count Condition: Approval of at least 75% in value of the Shares held by Shareholders
present and voting in person or by proxy at the meeting of the Shareholders to be convened to
approve the Scheme (“Scheme Meeting”);
• Head-count Condition: Approval of more than 50% of the number of Shareholders present and
voting in person or by proxy at the Scheme Meeting; and
• Court approval.
The Tan Shareholders and their concert parties will abstain from voting at the Scheme Meeting

[lupolupus]

I am surprised nobody is talking about this: I find the circumstances surrounding the offer sneaky:

1. Management is touting the 20% share price increase implied by the offer -- but this is based on the price prior before the (excellent) earnings announcement. The price would have probably jumped by a similar amount anyway without the buyout offer. So there is no real premium here!!!
2. Management has timed the buyout to coincide with the favorable news. This is unlikely to be coincidence. If the good news had been allowed to come before the buyout, everybody would laugh at the price offered.
3. The price prior to the offering was artificially depressed because of bad earnings in H1 2016. But if you look at the earnings, the main reason the earnings are low because they took a "restructuring charge" in SGA. No explanation is given for the restructuring charge and for why it had to be occurred exactly at this time.
4.  The price prior to the announced "restructuring" charge (when the last earnings were announced) was nearly 90 cents. So the price management offers is at at DISCOUNT to the price that would have prevailed without the restructuring charge. No premium here at all!!!

All of this is not illegal, surely, but it leaves a very bad taste in the mouth regarding how management thinks about minority shareholders.

Excluding the restructuring charge, the company would have normalized earnings of about 0.12 cents. Slapping on a multiple of 10 (conservative for a quality, low volatility business with good ROE) and adding cash per share of around 0.25 brings us to a price of 1.45. Management offer of 0.85 is a 70% (!) discount to this.

Bottom line is that I don't see how they can succeed. As I understand from the offer document, interested parties cannot vote on the scheme. So they need the supermajority of minority shareholders. People with their eyes open are unlikely to vote for that.

Good thing is that management effectively tells us that the business is worth more than 0.85 (and management is unlikely to take the company private if the business prospects were bad), so this should help the share price climbing towards fair value.


Lupolupus.

[lupolupus]

LIE KHIN SIN has taken a 5% position in Spindex. Does anybody have information about this investor -- is (s)he affiliated with management?

[cyclone]

New substantial shareholder emerged.

1,584,816 : 1,877,600  = 0.844

On 10 February 2017,  LIE KHIN SIN bought 1,877,600 shares for a consideration of S$1,584,816 and became a substantial shareholder.

[BlueKelah]

New substantial shareholder emerged.

1,584,816 : 1,877,600  = 0.844

On 10 February 2017,  LIE KHIN SIN bought 1,877,600 shares for a consideration of S$1,584,816 and became a substantial shareholder.

Lol guess he must have been the fella gobbling up the couple hundred lots I unloaded.

A quick google shows only this link about a high court judgement in 2005 involving PURCHASE OF 154,103 ASIA GENERAL HOLDINGS
LIMITED SHARES WITH BUY BACK OPTION
http://www.singaporelaw.sg/sglaw/laws-of...5-sghc-210

ASIA GENERAL HOLDINGS was taken private in 2006 so I guess he is probably a value investor who decided to up his stake.

[knightrid]

New substantial shareholder emerged.

1,584,816 : 1,877,600  = 0.844

On 10 February 2017,  LIE KHIN SIN bought 1,877,600 shares for a consideration of S$1,584,816 and became a substantial shareholder.

Lol guess he must have been the fella gobbling up the couple hundred lots I unloaded.

A quick google shows only this link about a high court judgement in 2005 involving PURCHASE OF 154,103 ASIA GENERAL HOLDINGS
LIMITED SHARES WITH BUY BACK OPTION
http://www.singaporelaw.sg/sglaw/laws-of...5-sghc-210

ASIA GENERAL HOLDINGS was taken private in 2006 so I guess he is probably a value investor who decided to up his stake.

I read the case.  This was a loan secured by the shares that the fella refused to return and claimed it was a sale of shares.

[cyclone]

872,256 : 1,038,400 = 0.84

On 13 February 2017, LIE KHIN SIN acquired additional 1,038,400 shares for a consideration of $872,256 via market transaction.

[cyclone]

446,544 : 531,600 = 0.84

On 14 February 2017, LIE KHIN SIN acquired additional 531,600 shares for a consideration of $446,544 via market transaction.
The total number of shares held after this acqusition are 7,447,600 shares (6.46% of total number of voting shares).