Boustead Projects

[CY09]

Often the passivness presented by minority investors gives owners the chance.

Pherhaps this is why minority investors (MI) should be more active during AGMs to ask the management how they are realising the value or what are they doing such that the share price reflect the true value. Otherwise, owners will take the advantage to present that they are "giving a good offer" that is above "depressed share prices" for MI to realise their stake.

Lion Teck Chiang was one of the earliest example followed by Hupsteel, Im not surprised such lowball offers will continue until minority investors starts becoming vocal, vote against the appointment of IDs

[weijian]

Another day another low ball offer!
https://www.sgx.com/mobileapp?action=vie...FZRNLNV8XB

Looking at the NAV, net cash, orderbook & future potential, the offer is kind of a joke!

I reckon Boustead shareholders are the obvious beneficiary of this (if they managed to get some BP shares via this), but otherwise this half-hearted offer price might just get underwhelming response from BP shareholders and waste the resources (times, efforts, money, papers and whatnot)

IMHO, if this is how Boustead treats BP minority shareholders, Boustead minority shareholders have to take note and be aware that they might get the same treatment in future.

Agree... a lowball offer.  The 2022 FY statements has the NAV at $1.25.  $0.90 is 30% below this price.  Suggest minority shareholders to carefully consider before agreeing. 

Trust FF Wong to come up with such stingy offer! Disappointing

Only a little while ago, BP OPMIs were cheering FF Wong for sharing the proceeds of BP's industrial properties' monetization. Of course, OPMIs were astute enough to position themselves at the subsidiary level (ie. BP) to enjoy the child paying up to the parent.

Fast forward to today, things seem to have changed?
FF Wong's stake in Parent: ~43%
FF Wong's direct stake in Child: ~19.3%

The numbers suggest that FF Wong is more incentivized via the Parent and so no surprises - whether is it for upwards payments or low ball offers.

There is nowhere in the offer document that indicates FF Wong will accept the offer. Normally for MBO (or MBO-like) offers, the Mgt as part of the consortium of the Offerer will generally state upfront on their willingness to accept the offer. So what does the absence of this acceptance statement means?

[ksir]

Another day another low ball offer!
https://www.sgx.com/mobileapp?action=vie...FZRNLNV8XB

Looking at the NAV, net cash, orderbook & future potential, the offer is kind of a joke!

I reckon Boustead shareholders are the obvious beneficiary of this (if they managed to get some BP shares via this), but otherwise this half-hearted offer price might just get underwhelming response from BP shareholders and waste the resources (times, efforts, money, papers and whatnot)

IMHO, if this is how Boustead treats BP minority shareholders, Boustead minority shareholders have to take note and be aware that they might get the same treatment in future.

Agree... a lowball offer.  The 2022 FY statements has the NAV at $1.25.  $0.90 is 30% below this price.  Suggest minority shareholders to carefully consider before agreeing. 

Trust FF Wong to come up with such stingy offer! Disappointing

Only a little while ago, BP OPMIs were cheering FF Wong for sharing the proceeds of BP's industrial properties' monetization. Of course, OPMIs were astute enough to position themselves at the subsidiary level (ie. BP) to enjoy the child paying up to the parent.

Fast forward to today, things seem to have changed?
FF Wong's stake in Parent: ~43%
FF Wong's direct stake in Child: ~19.3%

The numbers suggest that FF Wong is more incentivized via the Parent and so no surprises - whether is it for upwards payments or low ball offers.

There is nowhere in the offer document that indicates FF Wong will accept the offer. Normally for MBO (or MBO-like) offers, the Mgt as part of the consortium of the Offerer will generally state upfront on their willingness to accept the offer. So what does the absence of this acceptance statement means?

Nothing technically wrong for the Management (ie: BOD) of a company to take care of the benefit of the company they are being fed on (ie: Boustead holding). But it's just a pity if you are trying to acquire your own child company by grossly underpaying. For the very least you could be fair to pay the NAV and benefit from the future potentials (the RNAV, orderbook and future potential of new buildings they acquired and those maturing buildings such as Alice, Razer, ex-IBM etc). 

By not treating the minority shareholders as the partners, it doesn't reflect nicely on the Management. 
Imagine if they were to buy out BIF partners in less than NAV? How would that reflect in the mind of future partners? Badly I'd say.

<invested in Boustead Holding in BP in almost equal portion>

[dzwm87]

Both Boustead SG & Projects are such value investors' favorites but sadly, it had been a value trap. Boustead Project just never manage to narrow their RNAV discount.

In hindsight (and of course 10/10), it's quite a lesson how big this single mistake was when they chose to sell off their industrial properties to the REITs. It took more than a decade to catch up and even today, it is still not considered a critical mass for a good REIT holding.

[edragon]

Both Boustead SG & Projects are such value investors' favorites but sadly, it had been a value trap. Boustead Project just never manage to narrow their RNAV discount.

In hindsight (and of course 10/10), it's quite a lesson how big this single mistake was when they chose to sell off their industrial properties to the REITs. It took more than a decade to catch up and even today, it is still not considered a critical mass for a good REIT holding.

Sorry to say that hindsight is too simplistic. More importantly is (was) the reason of selling at the time of each project. Also as a developer/contractor and with contract to other parties, can they NOT sell?

[ghchua]

There is nowhere in the offer document that indicates FF Wong will accept the offer. Normally for MBO (or MBO-like) offers, the Mgt as part of the consortium of the Offerer will generally state upfront on their willingness to accept the offer. So what does the absence of this acceptance statement means?

It means that the Offeror (i.e. Boustead Singapore Limited) is unlikely to obtain 90% acceptance (other than those
already held by the Offeror, its related corporations or their respective nominees as at the date of the Offer and excluding any Shares held in treasury) and therefore there will not be any compulsory acquisition. Shareholders who continue to hold the shares will be holding an unlisted company after it had been sucessfully delisted from SGX.

Indeed, the Offeror had already made this statement in their offer announcement.

6.3 Compulsory Acquisition. The Offeror will not be able to avail itself of the powers of compulsory acquisition under Section 215(1) of the Companies Act 1967 of Singapore following the completion of the Offer.

[weijian]

@ksir
- rather than "almost equal portion in Boustead and BP", maybe the wiser method is to follow FF Wong's 2 Boustead for every 1 BP?
- It is obvious OPMIs and BIF partners are different breeds. The former is disoriented and miniscule when there is no unity. The latter is more professional (from money mgt perspective) and have bigger balls and wallet size. Different treatments for different breeds of course!

@dzwm87,
- Personally, I wouldn't necessarily classify them as value traps, as I can easily recall many worst ones listed on SGX that deserve the tag more. At least Boustead sold properties and made spin-offs (eg. BP), while BP created BIF and then paid the excess capital as cash. But maybe with the amount of cash on the balance sheet, it just didn't realize the full potential that the OPMI thought it had? But personally, I think they have done a decent to great job in the local context.

[ksir]

There is nowhere in the offer document that indicates FF Wong will accept the offer. Normally for MBO (or MBO-like) offers, the Mgt as part of the consortium of the Offerer will generally state upfront on their willingness to accept the offer. So what does the absence of this acceptance statement means?

It means that the Offeror (i.e. Boustead Singapore Limited) is unlikely to obtain 90% acceptance (other than those
already held by the Offeror, its related corporations or their respective nominees as at the date of the Offer and excluding any Shares held in treasury) and therefore there will not be any compulsory acquisition. Shareholders who continue to hold the shares will be holding an unlisted company after it had been sucessfully delisted from SGX.

Indeed, the Offeror had already made this statement in their offer announcement.

6.3 Compulsory Acquisition. The Offeror will not be able to avail itself of the powers of compulsory acquisition under Section 215(1) of the Companies Act 1967 of Singapore following the completion of the Offer.

Well spotted, ghchua, thanks.
If I remember correctly, you hold some shares in unlisted companies, could share the main differences? Aside from the obvious no-trade in stock exchange.

[ghchua]

If I remember correctly, you hold some shares in unlisted companies, could share the main differences? Aside from the obvious no-trade in stock exchange.

Hi ksir,

I think the main difference is really, information flow is not there. Unlike listed companies whereby they made announcements when there is a need to be made under the listing rules, unlisted companies will possibly send you an audited financial statement yearly and notice of AGM/EGM. No annual report. That's about it.

Also, do take note that unlisted companies are not required to disclose their corporate governance practices. They will also likely not to have any independent directors on board.

[EnSabahNur]

Boustead Projects closed today at 92 cents.

Does anyone have any ideas why anyone would want to trade at a price higher than the offer price?