CapitaMalls Asia

[egghead]

Seriously, is the $2.22 offer price that compelling?

I don't think $2.22 is a compelling valuation of CMA. However, judging by the many sellers the last 2 days, many seems to think it is.

[MINX]

Seriously, is the $2.22 offer price that compelling?

I don't think $2.22 is a compelling valuation of CMA. However, judging by the many sellers the last 2 days, many seems to think it is.

Incidentally Blackrock bought 18 lots at $2.20 on 15 Apr then sold 35 lots at $2.19. What on earth are they trying to do?

[CityFarmer]

Seriously, is the $2.22 offer price that compelling?

I don't think $2.22 is a compelling valuation of CMA. However, judging by the many sellers the last 2 days, many seems to think it is.

Incidentally Blackrock bought 18 lots at $2.20 on 15 Apr then sold 35 lots at $2.19. What on earth are they trying to do?

Funds sell upon investor redemptions, may be the sell transaction was one of them.

[starcraft_76]

For those who bought at 1.8x for short term gains, 2.19 is already provided a good profit.

(Not vested. Divested all holding @ 2.19 =.-)

[Temperament]

If you are happy with a bird in your hands is worth two in the bush, nobody should fault you. But remember to don't regret looking at the backview mirror. I always tend to buy and sell too early.

[MINX]

If you are happy with a bird in your hands is worth two in the bush, nobody should fault you. But remember to don't regret looking at the backview mirror. I always tend to buy and sell too early.

I would like to borrow the apple tree analogy posted by a Dave in another forum. CAPL planted a young apple tree, there are only a few young apples on the tree, CAPL sold the apple tree to buyers at $2.10. After a few years, the apple tree is maturing, there are more juicy apples on the tree now. Realizing that this is indeed a good apple tree, that is going to bear more juicy apples in the years to come, CAPL decide to buy back the apple tree, offering a premium of 10cts extra. So buyers who had help CAPL to shoulder the risk that the apple tree might not bear any apples ended up getting 10cts for their effort. Now is that a good deal, for CAPL yes, see what happen to its share price after the announcement. For minority shareholders, i'm not so sure.

[starcraft_76]

Indeed, I had partial sold my holding at a much lower price. However, nobody can predict what will happen tomorrow.

So just have to move on, and look for my next target.

[greengiraffe]

Why CMA investors may be cool to CapLand offer

Analysts wonder if offer price in $3b buyout is sufficiently attractive
Published on Apr 19, 2014 1:12 AM
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By Goh Eng Yeow, Senior Correspondent

CAPITALAND has enjoyed a good run-up in its share price since it launched a $3.06 billion buyout of the rest of mall operator CapitaMalls Asia (CMA), in which it already holds a 65.3 per cent stake.

It closed five cents up at $3.18 on Thursday, giving it a rise of 8.9 per cent for the week.

Analysts have given the buyout the thumbs up. Among the deal's merits: simplifying CapitaLand's organisational structure while helping it re-invest the $1.5 billion cash proceeds which the property giant reaped from selling its stake in Australia-listed Australand.

But it may also make CapitaLand more attractive in the sense that it no longer has to compete with CMA for investors' favour. Both CapitaLand and CMA are component stocks on the benchmark Straits Times Index.

In fact, one seductive line being sold to CMA investors is to switch out at CapitaLand's $2.22 offer, which prices CMA at 1.2 times book value, and reinvest in CapitaLand itself, which trades only at 0.8 times book value.

But the big question, as Maybank Kim Eng analyst Wilson Liew puts it, is whether the offer price is sufficiently attractive for CMA's minority shareholders to take up, even though a CMA delisting would be positive for CapitaLand.

The offer is conditional on CapitaLand getting enough acceptances to power its 65.3 per cent stake past the 90 per cent threshold in order to get CMA delisted.

Sure, if the privatisation succeeds, it would rank as one of CapitaLand's most astute acquisitions, allowing it to leverage on CMA's retail expertise while keeping it as a key earnings driver.

But then again, investors may prefer to invest in a pure mall operator such as CMA rather than in a more diversified conglomerate such as CapitaLand, which has exposure in other property-related businesses.

Recent research reports on CMA also suggest that the mall operator's business outlook is brightening.

CIMB analyst Donald Chua noted in February that CMA's positioning as a mass to mid-tier retail operator would make it "a little more defensive against a potential decline in domestic consumption" in China.

He also anticipated that CMA would be able to renew leases at higher rates as more of the malls it built three to four years ago enter their second leasing cycle.

CMA has 105 malls in its portfolio. There are 85 already operating, of which 51 are in China, 19 in Singapore, eight in Japan, five in Malaysia and two in India.

The CMA deal also won the thumbs up from Barclays Research property analyst Tricia Song, who described it as a win-win for both CMA and CapitaLand.

She noted that until the buyback announcement, CMA shares had not hit $2.20 since January last year while its average traded price has languished at around $1.83 since the counter listed at $2.12 four years ago.

But Ms Song also felt that as the offer was conditional on getting another 24.7 percentage points of CMA share acceptances, there could still be a chance that the privatisation might not materialise.

Some investors might view the offer as too low, given the average Bloomberg price target for CMA had been $2.27, she said.

As it is, the many favourable reports issued on CapitaLand since the buyout offer was made on Monday may reinforce the impression among CMA investors that it might be a better idea to hang on to their shares.

CapitaLand might be hungrier to do the deal than it has let on.

engyeow@sph.com.sg

[egghead]

CapitaLand might be hungrier to do the deal than it has let on....my sentiment as well

[intellect]

CapitaLand might be hungrier to do the deal than it has let on....my sentiment as well

Me too. Have been holding on since IPO, waiting for it to bear fruits.
Bullish about the malls in China as CapitalMallAsia does have the expertise of making malls works.