Auric Pacific Group

[YMPL]

If liquidity is not a concern than Auric is truly a "sixty-cents-on-the-dollar" stock, based on the report.  

Would it be a shame for investors if Auric Pacific delists?

SINGAPORE (Feb 22): CIMB Research continues to keep its “add” recommendation on Auric Pacific Group with an unchanged target price of $1.96 after the group on Tuesday posted a turnaround in FY16 with $72 million in earnings, which was largely in line with the research house’s expectations.
...
In a report on Tuesday, CIMB cautions that its current rating and target price on the stock, which is based on a 25% liquidity discount to the research house’s FY17 SOP estimate of $2.61 per share, is valid only if the group is to remain listed.
...
http://www.theedgemarkets.com.sg/article...ic-delists

[dydx]

If liquidity is not a concern than Auric is truly a "sixty-cents-on-the-dollar" stock, based on the report.  

Would it be a shame for investors if Auric Pacific delists?

SINGAPORE (Feb 22): CIMB Research continues to keep its “add” recommendation on Auric Pacific Group with an unchanged target price of $1.96 after the group on Tuesday posted a turnaround in FY16 with $72 million in earnings, which was largely in line with the research house’s expectations.
...
In a report on Tuesday, CIMB cautions that its current rating and target price on the stock, which is based on a 25% liquidity discount to the research house’s FY17 SOP estimate of $2.61 per share, is valid only if the group is to remain listed.
...
http://www.theedgemarkets.com.sg/article...ic-delists

Definitely it will be a shame, as Auric Pacific has a very long corporate history and very established local brand-name products/businesses - Sunshine breads, SCS butter, Auric Pacific Marketing, Food Junction chain of foodcourts, Delifrance chain of cafes - that have touched the hearts and minds of so many Singaporeans and local residents. It is also a shame because the main person - Dr Stephen Riady - behind the current GO to privatise Auric Pacific has been responsible for overseeing the group's businesses and finances for many years now, and under his care, the company had made quite a few major capital allocation mistakes, including Delifrance and other unquoted investments. Now that the 2 previously loss-making business divisions - Food Junction and Delifrance - have been turned around (based on the latest FY16 full-year result), Dr Riady on 7Feb17 announced a well-planned GO but with a low-ball offer at $1.65/share, to buy out all the 2000+ minority shareholders and the remaining 23+% they together own. 

As it is very clear to many minority shareholders what Dr Riady's main motivations are, so there is no prize for guessing by fellow VBs.

[pianist]

If liquidity is not a concern than Auric is truly a "sixty-cents-on-the-dollar" stock, based on the report.  

Would it be a shame for investors if Auric Pacific delists?

SINGAPORE (Feb 22): CIMB Research continues to keep its “add” recommendation on Auric Pacific Group with an unchanged target price of $1.96 after the group on Tuesday posted a turnaround in FY16 with $72 million in earnings, which was largely in line with the research house’s expectations.
...
In a report on Tuesday, CIMB cautions that its current rating and target price on the stock, which is based on a 25% liquidity discount to the research house’s FY17 SOP estimate of $2.61 per share, is valid only if the group is to remain listed.
...
http://www.theedgemarkets.com.sg/article...ic-delists

wah 72mio earnings... My god....

[dydx]

At the close of market-day today (22Feb17), Offeror and Concert Parties have secured 80.37% of Auric Pacific....
http://infopub.sgx.com/FileOpen/Dealing%...eID=440285
including 3.65% (4,589,600 shares) mopped up from the open-market in the last 11 market days since 7Feb17 (the announcement date of the GO) by paying the full GO price of $1.65/share plus brokerages and other incidental fees.

On 21Feb17 (yesterday; or Despatch Date), RHB Securities Singapore PL has also issued/despatched the all-important formal offer document....
http://infopub.sgx.com/FileOpen/Offer%20...eID=440005

The GO is now open for acceptances by minority shareholders and will close at 5:30PM on 24Mar17 (First Closing Date) or such later date(s) as may be announced from time to time by or on behalf of the Offeror. The GO will be subject to the Final Day Rule (defined as 60 days from Despatch Date, i.e. 22Apr17), unless extended with SIC's prior consent.

Notwithstanding RHB Securities Singapore PL has stated on the front-page of the document that "Offer Price of S$1.65 per Share is FINAL and will NOT be revised", it is interesting and perhaps also important to note that in APPENDIX 1 – DETAILS OF THE OFFER, Clause 1.6 (in p20 of the document) - reproduced in full below in blue - there is some mentioning on the timing requirements governing acceptances if the terms of the Offer are revised -

1.6 Revision. The Offeror will not revise the Offer Price. However, pursuant to Rule 20.1 of the Code, if the terms of the Offer are revised, the Offer will remain open for acceptance for at least 14 days from the date of despatch of the written notification of the revision to Shareholders. In any case, where the terms are revised, the benefit of the Offer (as so revised) will be made available to each of the Shareholders who have previously accepted the Offer.

I suppose if there are enough shares available for purchase which will bring about the Offeror and Concert Parties securing over the all-important 90% mark, the Offeror may just be willing to pay a higher price to secure those shares.

[bardsmanship]

If liquidity is not a concern than Auric is truly a "sixty-cents-on-the-dollar" stock, based on the report.  

Would it be a shame for investors if Auric Pacific delists?

SINGAPORE (Feb 22): CIMB Research continues to keep its “add” recommendation on Auric Pacific Group with an unchanged target price of $1.96 after the group on Tuesday posted a turnaround in FY16 with $72 million in earnings, which was largely in line with the research house’s expectations.
...
In a report on Tuesday, CIMB cautions that its current rating and target price on the stock, which is based on a 25% liquidity discount to the research house’s FY17 SOP estimate of $2.61 per share, is valid only if the group is to remain listed.
...
http://www.theedgemarkets.com.sg/article...ic-delists

wah 72mio earnings... My god....

Haha that's a typo, it's actually 7.2 mil earnings. 72 mil earnings would be amazing given their revenue for FY16 is 424 mil. 

[dydx]

Having gone through the formal offer document....
http://infopub.sgx.com/FileOpen/Offer%20...eID=440005
my first reaction is that RHB Securities Singapore PL (acting as Financial Adviser to the Offeror, Dr Stephen Riady ("SR") and his son-in-law Dr. Andy Adhiwana ("AA")) has made use of excessive scare tactics in the document, by repeatedly highlighting in boxes in the front-page, in Clause 2.1 (in pg8), and in Clauses 8.2, 8.3 and 8.4 (in pg12 to pg14), certain points designed by them for the advantage of the Offeor.

I find Clause 8.2 and Clause 8.4 contradicting and controversial. While LCR (Lippo China Resources Limited, listed on SEHK under Stock Code: 156; which owns 49.28% of Auric Pacific) and Goldstream (Goldstream Capital Limited, wholly owned by AA; which owns 27.44% of Auric Pacific) are considered and counted as Concert Parties for the purpose of the Offeror's stated Offer Condition (as defined under Clause 2.4 in pg9) and objective of attaining more than 90% of Auric Pacific in this GO exercise, in Clause 8.4 (which defines "No Put Right by Shareholders") the Offeror and its advisers have chosen to define/interpret the Offeror as not a “related corporation” of LCR or Goldstream, even though are 3 companies are ultimately owned or controlled by SR and/or AA. I hope the relevant people in SGX and SIC have taken note of this, as the spirit of the law should play an equally important role here.

After all the pain of trying to read and understand the contents in this document which is full of technical/legal stuff, my mind tells me that as the GO is pitched at a low-ball price of $1.65/share, minority shareholders like me who believe in the long-term value and further growth potential of the group businesses, should simply keep their valuable Auric Pacific shares, reject the Offeror's GO, and Auric Pacific will likely remain listed on SGX.

[holymage]

Any VBs attending SIAS Dialogue Session with Auric Pacific directors?

http://infopub.sgx.com/FileOpen/SIAS%20D...eID=442258


An interesting takeaway from Spindex's mandatory conditional offer, which is vastly different from Auric Pacific's self-interpretation of "concerted parties" - with regards to no "rights of compulsory acquisition" and no "put rights" to dissenting shareholders. This makes me wonder whether Auric Pacific's interpretation is legally correct.

"Compulsory Acquisition. As set out in paragraph 6.2 above, the Offeror intends to exercise any rights of compulsory acquisition that may arise under Section 215(1) of the Companies Act. Pursuant to Section 215(1) of the Companies Act, in the event that the Offeror acquires not less than 90% of the total number of issued Shares (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 by the Company as treasury shares), the Offeror would be entitled to exercise the right to compulsorily acquire all the Shares from Shareholders who have not accepted the Offer at a price equal to the Offer Price.
In addition, pursuant to Section 215(3) of the Companies Act, if the Offeror acquires such number of Shares which, together with the Shares held by it, its related corporations and their respective nominees, comprise 90% or more of the total number of issued Shares, the Shareholders who have not accepted the Offer have a right to require the Offeror to acquire their Shares at the Offer Price. Such Shareholders who wish to exercise such a right are advised to seek their own independent legal advice."

[YMPL]

Any VBs attending SIAS Dialogue Session with Auric Pacific directors?

http://infopub.sgx.com/FileOpen/SIAS%20D...eID=442258


An interesting takeaway from Spindex's mandatory conditional offer, which is vastly different from Auric Pacific's self-interpretation of "concerted parties" - with regards to no "rights of compulsory acquisition" and no "put rights" to dissenting shareholders. This makes me wonder whether Auric Pacific's interpretation is legally correct.

"Compulsory Acquisition. As set out in paragraph 6.2 above, the Offeror intends to exercise any rights of compulsory acquisition that may arise under Section 215(1) of the Companies Act. Pursuant to Section 215(1) of the Companies Act, in the event that the Offeror acquires not less than 90% of the total number of issued Shares (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 by the Company as treasury shares), the Offeror would be entitled to exercise the right to compulsorily acquire all the Shares from Shareholders who have not accepted the Offer at a price equal to the Offer Price.
In addition, pursuant to Section 215(3) of the Companies Act, if the Offeror acquires such number of Shares which, together with the Shares held by it, its related corporations and their respective nominees, comprise 90% or more of the total number of issued Shares, the Shareholders who have not accepted the Offer have a right to require the Offeror to acquire their Shares at the Offer Price. Such Shareholders who wish to exercise such a right are advised to seek their own independent legal advice."

The key point here is "related corporation". The Silver Creek Capital isn't "related" based on the legal definition in the Companies Act.

[dydx]

Any VBs attending SIAS Dialogue Session with Auric Pacific directors?

http://infopub.sgx.com/FileOpen/SIAS%20D...eID=442258


An interesting takeaway from Spindex's mandatory conditional offer, which is vastly different from Auric Pacific's self-interpretation of "concerted parties" - with regards to no "rights of compulsory acquisition" and no "put rights" to dissenting shareholders. This makes me wonder whether Auric Pacific's interpretation is legally correct.

"Compulsory Acquisition. As set out in paragraph 6.2 above, the Offeror intends to exercise any rights of compulsory acquisition that may arise under Section 215(1) of the Companies Act. Pursuant to Section 215(1) of the Companies Act, in the event that the Offeror acquires not less than 90% of the total number of issued Shares (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 by the Company as treasury shares), the Offeror would be entitled to exercise the right to compulsorily acquire all the Shares from Shareholders who have not accepted the Offer at a price equal to the Offer Price.
In addition, pursuant to Section 215(3) of the Companies Act, if the Offeror acquires such number of Shares which, together with the Shares held by it, its related corporations and their respective nominees, comprise 90% or more of the total number of issued Shares, the Shareholders who have not accepted the Offer have a right to require the Offeror to acquire their Shares at the Offer Price. Such Shareholders who wish to exercise such a right are advised to seek their own independent legal advice."

The key point here is "related corporation". The Silver Creek Capital isn't "related" based on the legal definition in the Companies Act.

But Silver Creek Capital ("the Offeror")'s shareholders are Dr Stephen Riady ("SR"; 80%) and Dr Andy Adhiwana ("AA"; 20%), and AA has a beneficial interest in Goldstream Capital Ltd ("Goldstream") which holds 27.44% of Auric Pacific, and SR has a beneficial interest in Lippo China Resources Ltd ("LCR"; listed on SEHK) which holds 49.28% of Auric Pacific. The Offeror, Goldstream and LCR are beneficially owned or controlled by SR and/or AA, and AA is the son-in-law of SR. The Offeror, Goldstream and LCR and related corporations with common ultimate ownership/control. Shouldn't logic or the spirit of the Law prevail as well in this case? I would love to hear the views of fellow VBs with some legal background, knowledge or experience.

[ghchua]

IFA said that the offer is fair and reasonable.