China Minzhong Food Corporation

[specuvestor]

what are the risks of this deal not going through?

Salim cannot vote so 12% OPMI could be dumb enough to vote against... I think not...

Specuvestor : any comment on the offer. strangely why do you think they are doing convertible option as open offer.

The exchangeable bond is to revert Indofood's position back to square one of about 30% stake.

But this statement is incredibly interesting:
"The CMZ Management Promissory Notes shall not be repayable by the Offeror until after the expiry of 18 months from the date of issue and provided that the Offeror has sufficient funds to repay the amount of principal outstanding under the CMZ Management Promissory Notes."

After Salim takes control of the CMZ under the Marvelous Glory entity, this entity will have to firstly pay the interest for the exchangeable bond and then end of 18 months pay S$38,620,320 to Lin and mgt. And Marvelous Glory cashflow derives purely from CMZ. So if there is no cashflow, they don't have to pay ie Lin will lose his 5% stake of $38,620,320, as well as the Earnest Sum of S$40m.

Basically if CMZ is fluke, Indofood redeems bond and strip Marvelous Glory of all cash, and Marvelous Glory can close shop without paying any promissory note. But net net Salim is still taking a risk here by doubling down a failed repo trade and privatizing it as he is paying cold hard cash for the 12% OPMI stake... maybe Weijian is right that he cares about reputation now? No one outside will be wiser 18 months down the road what happens then.

[getrich]

what are the risks of this deal not going through?

Salim cannot vote so 12% OPMI could be dumb enough to vote against... I think not...

Specuvestor : any comment on the offer. strangely why do you think they are doing convertible option as open offer.

The exchangeable bond is to revert Indofood's position back to square one of about 30% stake.

But this statement is incredibly interesting:
"The CMZ Management Promissory Notes shall not be repayable by the Offeror until after the expiry of 18 months from the date of issue and provided that the Offeror has sufficient funds to repay the amount of principal outstanding under the CMZ Management Promissory Notes."

After Salim takes control of the CMZ under the Marvelous Glory entity, this entity will have to firstly pay the interest for the exchangeable bond and then end of 18 months pay S$38,620,320 to Lin and mgt. And Marvelous Glory cashflow derives purely from CMZ. So if there is no cashflow, they don't have to pay ie Lin will lose his 5% stake of $38,620,320, as well as the Earnest Sum of S$40m.

Basically if CMZ is fluke, Indofood redeems bond and strip Marvelous Glory of all cash, and Marvelous Glory can close shop without paying any promissory note. But net net Salim is still taking a risk here by doubling down a failed repo trade and privatizing it as he is paying cold hard cash for the 12% OPMI stake... maybe Weijian is right that he cares about reputation now? No one outside will be wiser 18 months down the road what happens then.

don't waste your time. these are incredibly savvy deal-makers and eagle-sharp businessmen. mere mortals like you wouldn't be able to decipher their machinations.

singapore needs more foreign talent like Anthoni Salim and Lin Guo Rong. they are world-class job creators and highly innovative entrepreneurs.

[newborn1000]

Yes we all know they are world class, we welcome them.........but the above post dont make a good discussion

[weijian]

what are the risks of this deal not going through?

Salim cannot vote so 12% OPMI could be dumb enough to vote against... I think not...

Before it goes to the 12% OPMI of CMZ, it seems like it still needs to go through each of the ~50% OPMIs of First Pacific and Indofood first. Both of these companies should have a net gain from CMZ ceasing to become a subsidiary of IndoFood (it will revert to recognize CMZ's profits as a line item rather than consolidation).

[weijian]

IFA report is out and endorsed by IDs - It's not fair, but do accept the cash and move on.

http://infopub.sgx.com/FileOpen/Circular...eID=430575

Based on our analysis, and after having considered carefully the information available to us as at the Latest Practicable Date, we are of the opinion that the financial terms of the Offer are, on balance, not fair but reasonable. Accordingly, we advise the Independent Directors to recommend Shareholders to ACCEPT the Offer in respect of the Cash Consideration or sell their Shares
in the open market if they can obtain a price higher than the Offer Consideration after deducting expenses. The Offer Consideration offers Shareholders an exit opportunity and there is no certainty that Shareholders will otherwise be able to obtain a better value for their Shares if the Offer lapses.

Notwithstanding that the Cash and Exchangeable Bonds Consideration is equivalent to the Cash Consideration in terms of nominal dollar value, as the Offeror is ascribing a value of S$1.20 to each Exchange Share, we advise the Independent Directors to recommend Shareholders to REJECT the Offer in respect of the Cash and Exchangeable Bonds Consideration. Initially, they may
end up holding the Exchangeable Bonds which will not bear any interest, which are not transferable and for which there is no existing market. The Exchangeable Bonds will be mandatorily exchanged into Exchange Shares at the Exchange Price at the expiry of the Exchange Period. In the event that the Offeror is entitled to exercise its right of compulsory acquisition pursuant to Section 215(1) of the Companies Act and the Offeror exercises such right of compulsory acquisition, these Exchange Shares may be delisted. Shares of an unlisted company are generally valued at a discount to the shares of comparable listed companies and Shareholders may face potential difficulties in selling their shares as there will an absence of a ready public market. Being unlisted, there would be limited information available to Shareholders as the Company will no longer be required to comply with listing requirements of the SGX-ST, in particular the corporate disclosure requirements under Chapter 7 of the Listing Manual. Shareholders should consider the risks relating to holding the Exchangeable Bonds and Exchange Shares under Appendix 7 of the Offer Document.”

RECOMMENDATION OF THE INDEPENDENT DIRECTORS
The Independent Directors, having carefully considered the terms of the Offer and the advice given by the IFA to the Independent Directors in the IFA Letter, CONCUR with the advice of the IFA in respect of the Offer.

[cyclone]

Date & Time of Broadcast : 07-Dec-2016 21:34:38

Accordingly, CIMB wishes to announce, for and on behalf of the Offeror, that the Minimum Acceptance Condition of the Offer (as set out in Section 3.7 of the Offer Document) has been satisfied and the Offer has therefore become and is hereby declared unconditional in all respects on the date of this Announcement.

the Offeror is entitled to, and intends to, exercise its right of compulsory acquisition under Section 215(1) of the Companies Act to compulsorily acquire all the CMZ Shares of Shareholders who have not accepted the Offer (the “Dissenting Shareholders”), at a price equal to the Offer Consideration

Subsequent to such compulsory acquisition, the Offeror will proceed to delist the Company from the SGX-ST.