China Minzhong Food Corporation

[Wildreamz]

My point is, the thing that concern most to investors should not be the label that people put on it but the actual risk that it has, including the probability that it being a fraudulent business, fake assets, illegal activity in its operation, alignment of goal of management team with the goal of investors, certainty of its cash flow etc.

I am just saying, based on the events of the past week, all these uncertainties about Minzhong "seems" more certain now, "if" Indofood is speaking the truth.. I need to clarify it is definitely not a buy or sell call.

I have yet to decide what to do with my position in CMZ.

[cif5000]

Certainly Indofood offering at SGD1.12 is very strange considering their 6 months period is ending soon, so they could have been opportunistic and done it at say 70cts.

It is strange take a few hundred millions and slap it on a trouble maker's face. But by doing so, you earn the respect of many others. Suddenly, you have friends on your side. Doing business in future is a lot easier.

[Jared Seah]

"Certainly Indofood offering at SGD1.12 is very strange considering their 6 months period is ending soon, so they could have been opportunistic and done it at say 70cts. "


I don't understand numbers; but I thought I understand people (greed, joy in buying during sales, etc)...

If I Indofood, and I intend to take the company private, I would let the share price drop for all I care. Now is the perfect storm to pick CMZ for a song - taper concerns, Syria, emerging market sell-off, etc.

Why on earth would I make a GO now? Cut my nose just to spite Glaucus?

Is "face" more important than money? Why the urgency?

Wait a minute! Hmm....

Oh! Silly me!

[WolfT]

"Certainly Indofood offering at SGD1.12 is very strange considering their 6 months period is ending soon, so they could have been opportunistic and done it at say 70cts. "


I don't understand numbers; but I thought I understand people (greed, joy in buying during sales, etc)...

If I Indofood, and I intend to take the company private, I would let the share price drop for all I care. Now is the perfect storm to pick CMZ for a song - taper concerns, Syria, emerging market sell-off, etc.

Why on earth would I make a GO now? Cut my nose just to spite Glaucus?

Is "face" more important than money?

Wait a minute! Hmm....

Oh! Silly me!

Yes Sir! This is the part i am confuse too.
I wonder if Cmz promised some deals which indoF can't refuse...

[Vseeker]

they bought from GIC's Tetrad Ventures on 01-March, so 6-mths period actually already over.

why didn't Indofood just catch more at sub 60c level first, before making Offer... and I believe just at sub 80c level could also have done the job.

my wild speculation is that Glaucus's report if proven to be true - make too many parties look really bad,
not only Salim grp lose face, so will GIC too coz its been in CMZ for so many years and why neber blow whistle ??

some more there's the high level Spore delegations just visited China + now the Chinese Premier himself is in Spore
=> so my wild theory is: big headlines on TV & Newspaper screaming about yet another scandalous Schip saga - would just be too much embarrassment for all around.

so maybe Indofood got lots of cheerleaders on the sidelines - Salims, GIC, CIC ?? hahaha !

plus CMZ's at only 655m iss shr , make it easier to digest
(a YZJ's 3.831 billion shrs will be too-big-to-bail !! )

[Wildreamz]

Some thoughts:

1. There is a difference between having a major stake and a controlling stake (as of yesterday, Indofood now owns 51.62% of all CMZ shares).

2. It doesn't make sense to burn money to prop up a shell company, let alone take a shell company private, unless, of course, there is some kind of exit strategy, which I don't see. If you do, please enlighten me.

3. There are many dangers if major shareholder like Indofood did not support China Minzhong at this juncture.

Firstly, artificially depressed share price may put China Minzhong' at risk from corporate raiders.

Secondly, it may greatly affect the credit rating of the company, which will affect the ability of the company to raise cash, and in the worst case go bankrupt.

Third, if enough doubt is raised about the company, it may trigger a series of costly lawsuits, which may put its operation at risk and aggravate point 2.

4. I am not sure what China Minzhong management could have "offered" Indofood in exchange for a few hundred million SGD worth of cash.

5. There is just something circular about Glaucus using Minzhong's own SAIC filings to expose China Minzhong. There must be at least some level of original third party independent research, or resource here, for their argument to be more convincing.

My 2c.

[mrEngineer]

My guess is the retention of key management who has shareholdings and will like to retain some form of control. Amounts less than 1b is no feat for Salim group, digest the company, change its name and write a new record. In the past if Salim would have activated the GO there might be a risk of losing the key managers. But now the key managers have no reason to reject e GO and would thank Salim for saving their reputation.

[Wildreamz]

Update: Moody's Investors Service has placed China Minzhong Food Corporation Ltd's Ba3 corporate family rating on review for upgrade.

[weijian]

As the dust settles, and the great war between greed and fear starts (considering it was almost entirely fear previously), just some random thoughts:

(1) Glaucus accusations
- SAIC documents vs SAT documents: In both replies, CMZ made no mention that Glaucus's SAIC documents were fake and in fact, indirectly admitted that they are REAL. As much as the Salim group leaves much to be desired in their track record (d.o.g had mentioned something about their accqusition of QAF), it would be unthinkable that at this time, IndoFood had not had access to CMZ's SAIC and SAT documents for the clear picture. This seems to be a genuine case of grey documentation...IndoFood seems to have put the money where their mouth is.
- PRC GAAP vs IFRS: I would be assuming with FY13 results coinciding, CMZ auditors Crowe Horwath have worked overtime in the last 1 week. There does not seem to have been any withdrawal of unqualified opinion yet...

(2) CMZ and IndoFood - An IndoChina whirlwind romance?
- Re-reading the comments, most forumers did not expect IndoFood to make a G.O, let alone at 1.12sgd.
- Tracking back to Feb2013 when both met under matchmaker UOBKayHian, it only took IndoFood less than 3 weeks to buy an additional 15% stake after their initial foray. IndoFood was even more impulsive this time around, seemingly taking just 1 week to make a 'marriage proposal'. My guess is that like the Microsoft-Nokia marriage that was announced today but was first conceived earlier in the year, IndoFood had been doing their homework on increasing their stake beyond 30% in CMZ and in the last week, Glaucus simply 'forced' their hand.
- The offer price of 1.12sgd was the last thing on every rational value retail investor's mind - why pay more when you can take opportunity of market fear and pay at least 15-30% cheaper for a larger stake or complete takeover? My guess is, this is a result of both protecting reputations and revenge. IndoFood might have wanted to be seen more as white knights rather than opportunists. In addition, the last thing Mgt would want, is Glaucus covering their shorts with a profit if the G.O. was made at a lower price..

[kang]

Sometimes 'face' is more important than money especially when one is filthy rich. Salim is a predator and now Glaucus is provoking the predator? He will look like a fool if Glaucus achieve its aim. Moreover, what is money to him?He can easily afford the amount. What is more important is to exact revenge on Glaucus and issue a warning to those who are thinking about messing with him.