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Who in the right mind would want to launch a GO on a listed company to buy out the minority shareholders if there isn't a big enough potential financial gain or other strategic benefits? In Spindex's case, the most reliable valuation yardstick for the underlying business is probably to take reference with Innovalues, which is near the final closure of a successful privatisation by Northstar Equity Partners at a market cap of $331.4m, or close to 3.4x 31Dec16 NAV at $98.5m. This valuation is a lot higher than the $98.1m, based on the GO at $0.85/share the Tans is offering for Spindex's minority shareholders. $331.4m for Innovalues may be a bit stretched, but $98.4m for Spindex is certainly a bargain and therefore inadequate.
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With the experience of selling MMI to the PE, Tan Choo Pie plays his cards really well this time round...
Brilliant move on his part to tell the world that his stakes r not for sale, at least for now..
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so is it game over for existing shareholders after this evening's announcement?
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I am under the guidelines of this forum not allowed to be make any comments regarding the Tan's, so I will refrain from doing so. I would advice other holders to file a complaint and to vote against the mandatory offer. Hopefully there will be an investigation. Best thing we can hope for now is that the take-up for the offer is less than 90%. This should be the case, but one can never know.
Regards,
Quickbeam
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Regarding CY, it is not over if you vote against. The company will remain listed.
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09-03-2017, 01:02 AM
(This post was last modified: 09-03-2017, 08:13 AM by BlueKelah.)
(08-03-2017, 10:13 PM)dydx Wrote: Who in the right mind would want to launch a GO on a listed company to buy out the minority shareholders if there isn't a big enough potential financial gain or other strategic benefits? In Spindex's case, the most reliable valuation yardstick for the underlying business is probably to take reference with Innovalues, which is near the final closure of a successful privatisation by Northstar Equity Partners at a market cap of $331.4m, or close to 3.4x 31Dec16 NAV at $98.5m. This valuation is a lot higher than the $98.1m, based on the GO at $0.85/share the Tans is offering for Spindex's minority shareholders. $331.4m for Innovalues may be a bit stretched, but $98.4m for Spindex is certainly a bargain and therefore inadequate. Spindex offer is from owner boss, innovalues buyout is from external fundy. Can't compare and expect them to be similar.
One would expect an external fund trying to buyout a company's opmi and boss to be offering much higher price.
Remember the Superbowl privatisation? Owner Hiaphoe only paid like 75c for company with property assets worth over $1++.
Julian bream u no need to sell or fill in form. Just hold, if it hit 90% acceptance, co delist and money for ur stocks should go straight to your bank, unless u have account where the shares are held by broker and not in ur cdp.
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I am holding on and saying no.
1. Prior to the 2H results, the share price already hit the 90c region. It was solely due to the impairments from relocating plants that the prices fell on relatively low volumes to such silly levels. An 85c offer on the basis of it being a "premium" to the 6m VWAP is silly.
2. Now that the Tans have already committed 25%*115mio*0.85 = $24.4mio to mop up 25% of the shares, the logical thing next is to then strip out the cash on the balance sheet thru special dividends to fund the acquisitions. Perhaps with a much higher shareholding of the firm, the Tans can then be more incentivised to optimise the capital structure and ROE of the firm.
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(09-03-2017, 01:02 AM)BlueKelah Wrote: (08-03-2017, 10:13 PM)dydx Wrote: Who in the right mind would want to launch a GO on a listed company to buy out the minority shareholders if there isn't a big enough potential financial gain or other strategic benefits? In Spindex's case, the most reliable valuation yardstick for the underlying business is probably to take reference with Innovalues, which is near the final closure of a successful privatisation by Northstar Equity Partners at a market cap of $331.4m, or close to 3.4x 31Dec16 NAV at $98.5m. This valuation is a lot higher than the $98.1m, based on the GO at $0.85/share the Tans is offering for Spindex's minority shareholders. $331.4m for Innovalues may be a bit stretched, but $98.4m for Spindex is certainly a bargain and therefore inadequate. Spindex offer is from owner boss, innovalues buyout is from external fundy. Can't compare and expect them to be similar.
One would expect an external fund trying to buyout a company's opmi and boss to be offering much higher price.
Remember the Superbowl privatisation? Owner Hiaphoe only paid like 75c for company with property assets worth over $1++.
Julian bream u no need to sell or fill in form. Just hold, if it hit 90% acceptance, co delist and money for ur stocks should go straight to your bank, unless u have account where the shares are held by broker and not in ur cdp.
Sent from my MotoG3 using Tapatalk
Thanks for the inputs, BlueKelah.
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(09-03-2017, 08:49 AM)AQ. Wrote: I am holding on and saying no.
1. Prior to the 2H results, the share price already hit the 90c region. It was solely due to the impairments from relocating plants that the prices fell on relatively low volumes to such silly levels. An 85c offer on the basis of it being a "premium" to the 6m VWAP is silly.
2. Now that the Tans have already committed 25%*115mio*0.85 = $24.4mio to mop up 25% of the shares, the logical thing next is to then strip out the cash on the balance sheet thru special dividends to fund the acquisitions. Perhaps with a much higher shareholding of the firm, the Tans can then be more incentivised to optimise the capital structure and ROE of the firm.
I agree. Most serious investors can easily see and understand the $0.85/share is a low ball offer when compared with (1) Spindex's continued capacity to generate steady business growth and increasing free cash flow; and (2) the relatively much higher market valuation of arch-rival Innovalues in their recent successful privatisation.
If the Tans fail to privatise Spindex this round, they will have to be prepared to pay much more in their 2nd GO attempt later. Meanwhile, unless the Tans have lots of spare private cash, they will have to upstream part of Spindex's large and growing cash reserve via dividends to repay the personal debts taken for the current GO. Usually, such dividends would come soon, unless the Tans do not mind paying more interests to their financiers.
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a nice summary by NextInsight to sum it all up with extracts from MKE and DBSV's reports.
https://www.nextinsight.net/story-archiv...ball-offer
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