Portek International

[yeokiwi]

DMG released a report today giving Portek a TP of $1.56

http://www.remisiers.org/cms_images/rese...uy_Dmg.pdf

When I read the report, 3 words come to my mind... 马后炮。（horse behind cannon)
I did not see any analyst coming out with anything closed to $1.56 before ICTSI offer.

[pianist]

are u going to wait beyond ICTSI's offer deadline of 20 July? Do u buy what the IFA report said?
today's market closiing price of 1.305 makes ICTSI's offer looks very silly.

[dydx]

today's market closiing price of 1.305 makes ICTSI's offer looks very silly.

If yesterday's (8Jul11) buying and the 3,489 lots done included accumulation by the 3rd-Party or white knight, it would simply suggest that an alternative GO of at least $1.27 (the lowest price transacted yesterday, within the price range of $1.27 to $1.31) is likely forthcoming. It would also suggest that to stay in the game, ICTSI would have to up its GO price and extend its offer closing beyond 20Jul11.

Yesterday's buying together with those done in the last 2 weeks also suggest that the fair value of each Portek share is higher than ICTSI's offer of $1.20, and quite a lot of investors - including likely the white knight - are betting on the eventual emergence of an alternative higher GO.

[guru]

Hi, I heard from my friend that in a GO, if there is a competing offer, even if we have tendered to ICTSI, we can still change and tender the shares to the White Knight in waiting. Can anyone verify?

today's market closiing price of 1.305 makes ICTSI's offer looks very silly.

If yesterday's (8Jul11) buying and the 3,489 lots done included accumulation by the 3rd-Party or white knight, it would simply suggest that an alternative GO of at least $1.27 (the lowest price transacted yesterday, within the price range of $1.27 to $1.31) is likely forthcoming. It would also suggest that to stay in the game, ICTSI would have to up its GO price and extend its offer closing beyond 20Jul11.

Yesterday's buying together with those done in the last 2 weeks also suggest that the fair value of each Portek share is higher than ICTSI's offer of $1.20, and quite a lot of investors - including likely the white knight - are betting on the eventual emergence of an alternative higher GO.

[portuser]

I may not attend the gathering on Tuesday.
I think ICTSI should be asked whether in working out its offer price of $1.20, did it foresee Portek receiving the full profit from Gabon. Given that the adjudication on profit sharing arrangement was made weeks after ICTSI announced its offer, this was highly unlikely.
Portek will now be entitled to the profit share that it made provision previosly. Since this amount would be around $3.3m for FY 11 (against an expected profit of $15m with profit share), the offer price should raised by 20%.

[pianist]

Hi, I heard from my friend that in a GO, if there is a competing offer, even if we have tendered to ICTSI, we can still change and tender the shares to the White Knight in waiting. Can anyone verify?

r u sure about that? i dun think so because once u accept ICTSI's offer by submitting to CDP, CDP after a few days will credit the monies into your bank account. so i think u better think twice or check first.

[dydx]

Latest BT report on Portek, re-produced in full below....

"Published July 9, 2011
Portek shares surge on 'undervalued' report

DMG suggests fair value of $1.56, valuing its port business at 14x earnings - 'in line with its regional peers' average'

By JOYCE HOOI

(Singapore)

PORTEK International shares surged 5.7 per cent in trading yesterday to $1.305, following a report that valued it at $1.56 - 30 per cent higher than what International Container Terminal Services Inc (ICTSI) is prepared to pay for it.

In the report, DMG & Partners Research's Terence Wong believes that ICTSI's cash offer of $1.20 per share for Portek 'undervalues the stock'.

This, despite the fact that Portek's independent financial adviser - CIMB Bank Bhd - had deemed ICTSI's offer 'reasonably attractive'.

At $1.20, the offer is at a 69 per cent premium over Portek's last traded price before the bid was announced.

The initiation report by DMG & Partners Research said that it had come to a fair value of $1.56 per share for Portek by valuing its port business at 14 times earnings, 'in line with its regional peers' average'.

The regional peers that it listed in comparison with Portek were companies such as China Merchants Holdings and Tianjin Port, which it said had market capitalisations of US$9.4 billion and US$1.3 billion, respectively. In comparison, Portek was listed as having a market cap of US$148 million.

The report also made a reference to the unnamed firm that has expressed interest in buying Portek in recent weeks but has not made an offer as yet.

'We believe there is a good likelihood of a bidding war for Portek given its attractive port franchise which is highly scalable as Portek has built up a fine track record for its expertise as a port operator and retrofitter,' the report said.

An ICTSI spokesman reiterating the firm's stance on the issue told BT yesterday: 'Our offer is the only firm offer on the table. We continue to believe the offer reflects the value of the combined business and management of Portek and ICTSI Far East.'

In a statement released to the Singapore Exchange (SGX) yesterday, HSBC Singapore - ICTSI's financial adviser - highlighted certain portions of its offer document that was released last month, on ICTSI's behalf.

Among the points that it reiterated was 'employees of the Portek Group have contributed significantly to the success of the company and (ICTSI) considers that the Portek Group's employees can play a role in both the future of the company and within ICTSI's extensive global platform'.

It added: 'Subject to the review, (ICTSI) currently does not envisage that there will be material changes to the continued employment of the employees of the Portek Group.'

The Securities Industry Council has given the other interested party 50 days from the date of ICTSI's offer document - roughly by Aug 11 - to announce if it is making an offer for Portek.

'Currently, there is only one offer on the table,' said David Gerald, president of the Securities Investors Association (Singapore) (SIAS).

'What shareholders need to consider seriously is if the majority vote against the offer of $1.20, hoping that there will be another offer; it may or may not happen. So shareholders have to make an informed decision,' he added.

ICTSI will also be holding a dialogue session with Portek shareholders organised by SIAS next Tuesday to address queries they have on the offer."

[portuser]

Lim & Tan issued the following today:
* The timing of a research report on Portek saying it is worth $1.56 a share, is “most interesting”. (The valuation is based on the PE of giants like China Merchants, which has a market cap of US$9.4 bln against Portek’s S$199 mln.)
* ICTSI’s $1.20 a share offer (announced on Jun 1st) is the only offer on the table, and is due to close on July 26th unless extended. (A failed attempt would mean ICTSI holding onto a stake that has no strategic significance, and having to stay away from making another attempt for 6 months.)
* The independent directors of Portek have, in their July circular, concluded the $1.20 offer is “reasonably attractive”. and have advised minority shareholders to accept or sell in the market at higher price than $1.20 (The stock had hit $1.30 on Jun 29th.).
* A Third Party emerged on Jun 8th (ie more than 4 weeks ago) and has been in talks with Portek and its founding Chairman Larry Lam who owns 41% of the company. It is unclear why nothing has materialized after >4 weeks (is it because the 3rd party is not prepared to launch a general offer thereby allowing Lam to remain on the share register! Think of Jaya Holdings and its CEO Chan.)
* 3rd party has been ordered by the SIC to declareits intentions by around Aug 11th
* The most pertinent question today therefore is, will ICTSI raise its offer should Portek’s share price stay at current levels, thanks to the new research report, and sufficiently enough to entice Mr Lam to accept. (Every 10-cent raise will cost an additional S$15.2 mln.)

The part in bold is not entirely correct.
The advice in its entirety is that shareholders should accept the $1.20 offer price or sell higher than $1.20 unless they (i) believe that the Third Party will proceed to make a general offer for the Shares, and that such offer will be more attractive than the Offer; and/or
(ii) hold a very favourable view of the Company’s prospects, either on a stand-alone basis or under the stewardship of the Offeror.

[dydx]

Portek halted this morning - good news or bad news?

[dydx]

To provide all shareholders parity of information, Portek has just released its unaudited (but reviewed by auditors Deloitte) accounts for the 9-month period ended 31Mar11.....
http://info.sgx.com/webcoranncatth.nsf/V...B0036A199/$file/Portek_Announcement_12July11.pdf?openelement

On a group basis, Portek's revenue and PBT/NP have continued to pose steady growth, together with a strong and liquid B/S.