Kingboard Copper Foil

[opmi]

KINGBOARD COPPER FOIL HOLDINGS LIMITED
(Company Registration No. 26998)
(Incorporated in Bermuda)
(Singapore Stock Code: K14)
other than those which are owned, controlled or agreed to be acquired by the Offeror Concert Group

FINAL OFFER PRICE
1. INTRODUCTION
Religare refers to the offer document dated 20 March 2017 in relation to the Offer. All
capitalised terms used herein, unless otherwise defined, shall have the meanings ascribed in
the offer document.

2. FINAL OFFER PRICE
The Offer Price of S$0.40 in cash per Share is final and the Offeror will not be revising the
Offer Price.

3. CLOSING DATE
The Closing Date for the Offer is 5:30 p.m. on 17 April 2017 or such other date(s) as may be
announced by the Offeror from time to time. Acceptances for the Offer must be received not
later than the Closing Date.

@opmi 
thanks for updating.

As I expected, no revised offer, they are likely to be happy to stick with the status quo.

The crazy thing is, the market price was still above $0.4 after the court ruling. Some investors actually believe there will be a revised offer? Why would they do that if they could get the good stuff (the copper foil at below market rates) indefinitely via this arrangement while de risking their BS by keeping KCF listed?

why would KB Group's BS risk be higher when making 100% subsi since 1) KBCF nearly all cash? 2) KB Group already consolidate KBCF's BS?

at 0.5 cents, it is a low price  to pay for betting for a higher offer...hahah...

[TTTI]

KINGBOARD COPPER FOIL HOLDINGS LIMITED
(Company Registration No. 26998)
(Incorporated in Bermuda)
(Singapore Stock Code: K14)
other than those which are owned, controlled or agreed to be acquired by the Offeror Concert Group

FINAL OFFER PRICE
1. INTRODUCTION
Religare refers to the offer document dated 20 March 2017 in relation to the Offer. All
capitalised terms used herein, unless otherwise defined, shall have the meanings ascribed in
the offer document.

2. FINAL OFFER PRICE
The Offer Price of S$0.40 in cash per Share is final and the Offeror will not be revising the
Offer Price.

3. CLOSING DATE
The Closing Date for the Offer is 5:30 p.m. on 17 April 2017 or such other date(s) as may be
announced by the Offeror from time to time. Acceptances for the Offer must be received not
later than the Closing Date.

@opmi 
thanks for updating.

As I expected, no revised offer, they are likely to be happy to stick with the status quo.

The crazy thing is, the market price was still above $0.4 after the court ruling. Some investors actually believe there will be a revised offer? Why would they do that if they could get the good stuff (the copper foil at below market rates) indefinitely via this arrangement while de risking their BS by keeping KCF listed?

why would KB Group's BS risk be higher when making 100% subsi since 1) KBCF nearly all cash? 2) KB Group already consolidate KBCF's BS?

at 0.5 cents, it is a low price  to pay for betting for a higher offer...hahah...

BS is consolidated but they still gotta account for non controlling/minority interests right? 
KCF is not a growth company and there's no way to try to grow either because competitors won't use KCF. Why privatize it (unless the share price is very cheap, in which case you are looking at it solely from an investment point of view), if you can just keep it listed and benefit all the same from this err "unique" arrangement? If you can buy it at a very low price, that's a different story and it makes sense to privatize cos you're basically trying to benefit from the differential (without paying any premium for growth cos there isn't any!)
If I can give a similar but opposite example, when FF Wong distributed Boustead Projects as dividend in specie out from the parent company Boustead Singapore, he said this exercise "de-risks" Boustead's BS as Boustead projects becomes a separate listed entity, even though Boustead still owns 51% of the listed BP.
With KCF, this would be the exact opposite scenario by privatizing.


"at 0.5 cents, it is a low price  to pay for betting for a higher offer...hahah..."

Hmmm ok let me see if I can break this down:
The quantum itself doesn't necessarily tell us anything right. Let's look at %.
Based on $0.405, with the risk being the $0.005 above the GO, that means you'd be risking 1.23% of your capital to bet on a higher offer/other positive developments.


Like you said, it is exactly that,  A Bet.
The offerer has already said there'll be no increased offer price, so I wouldn't even call this an educated bet. 
Also, this 1.23% risk only holds as long as the GO is valid. After the offer closes, the $0.4 portion of the $0.405 (current share price) is no longer guaranteed. It's hard to say how the share price would swing after the GO closes.
It can go up further (if the market deems a higher offer is STILL coming, or if dividends will be reinstated, other positive developments etc) or it can come down below $0.4 if the market determines that no offer is coming, and the limbo is no longer worth $0.4. 
Which would you think is more likely?

Now, the book value is approximately 65 cents. If there's a higher offer coming, let's be generous and assume the majority shareholders decide to pay book value. That's a 60% return from current $0.405!


So the question is:
Is risking 1.23% of your capital for a bet (without evidence, or in fact, evidence to the contrary), and with a time restriction in place (the 1.23% capital risk shoots up after the GO expires), justifiable in return for a potential increased offer generating a POSSIBLE 60%?

I'm sure when it comes to betting, everyone has a different opinion. Some may see risking 1.23% + the restrictions,  for possible 60% return as very good parameters. Afterall, 60% would be a very very nice return if all that comes true, while the 1.23% risk is not high enough to be fatal.

Personally, I wouldn't risk 1.23% for a possible 60% IF THE LIKELIHOOD of the 60% is not high.
I'd risk 12.3% for a possible 6%, IF THE LIKELIHOOD of this 6% happening is very very high.
But that's just me.

[d.o.g.]

The Kingboard Group has defeated Pope on appeal. This means that the status quo of renting out the premises will continue. Since the goal of the Kingboard Group is to obtain copper foil to meet its needs, there is no need to do anything else any more. Minority shareholders hoping for a reinstatement of dividends are likely to go unfulfilled since KBCF is barely profitable. An offer at a higher price would be seen as rewarding antagonists like Pope, so it is unlikely to happen.

IMHO the most likely outcome is that as minority shareholders lose hope, they will continue to sell down KBCF. Eventually the Kingboard Group may make another offer at a lower price. After all they will realize some savings in terms of listing fees etc if they do privatize the Group. But in order to send a message to troublemakers like Pope the offer price will be low. In fact it might actually be a smarter strategy to go short the stock since there will probably be no dividends, no higher offer etc. It would be fully aligned with the controlling shareholder's goals.

As usual, YMMV.

[TTTI]

The Kingboard Group has defeated Pope on appeal. This means that the status quo of renting out the premises will continue. Since the goal of the Kingboard Group is to obtain copper foil to meet its needs, there is no need to do anything else any more. Minority shareholders hoping for a reinstatement of dividends are likely to go unfulfilled since KBCF is barely profitable. An offer at a higher price would be seen as rewarding antagonists like Pope, so it is unlikely to happen.

IMHO the most likely outcome is that as minority shareholders lose hope, they will continue to sell down KBCF. Eventually the Kingboard Group may make another offer at a lower price. After all they will realize some savings in terms of listing fees etc if they do privatize the Group. But in order to send a message to troublemakers like Pope the offer price will be low. In fact it might actually be a smarter strategy to go short the stock since there will probably be no dividends, no higher offer etc. It would be fully aligned with the controlling shareholder's goals.

As usual, YMMV.

Hi d.o.g.

My thoughts exactly.

Although I was honestly rooting for POPE. 
Logic and reasoning though, has to take precedence over emotion.

[cif5000]

KINGBOARD COPPER FOIL HOLDINGS LIMITED
(Company Registration No. 26998)
(Incorporated in Bermuda)
(Singapore Stock Code: K14)
other than those which are owned, controlled or agreed to be acquired by the Offeror Concert Group

FINAL OFFER PRICE
1. INTRODUCTION
Religare refers to the offer document dated 20 March 2017 in relation to the Offer. All
capitalised terms used herein, unless otherwise defined, shall have the meanings ascribed in
the offer document.

2. FINAL OFFER PRICE
The Offer Price of S$0.40 in cash per Share is final and the Offeror will not be revising the
Offer Price.

3. CLOSING DATE
The Closing Date for the Offer is 5:30 p.m. on 17 April 2017 or such other date(s) as may be
announced by the Offeror from time to time. Acceptances for the Offer must be received not
later than the Closing Date.

@opmi 
thanks for updating.

As I expected, no revised offer, they are likely to be happy to stick with the status quo.

The crazy thing is, the market price was still above $0.4 after the court ruling. Some investors actually believe there will be a revised offer? Why would they do that if they could get the good stuff (the copper foil at below market rates) indefinitely via this arrangement while de risking their BS by keeping KCF listed?

why would KB Group's BS risk be higher when making 100% subsi since 1) KBCF nearly all cash? 2) KB Group already consolidate KBCF's BS?

at 0.5 cents, it is a low price  to pay for betting for a higher offer...hahah...

I agree that it was a good bet at $0.405 at the time when the unconditional offer was made. The premium to bet on a higher price was low vs the potential upside should there be a price increase. The downside was protected since the offer was unconditional. i.e. favourable odds

New facts surfaced, situation changed, and of course the same reasoning no longer applies. i.e. odds has changed

[activistasia]

The majority shareholders don't have to raise the offer price. They're not obliged to now....

Previously, the minorities are banking on the fact that the courts will enforce a compensation by making the majority shareholder buy them out.

Even if the majority loses the appeal, they are not obliged to buy from all minorities at all, much less to raise the price for all. If you read the judgement carefully, the court has been explicit in stating that any remedy will only apply to Pope's shares bought before the case is filed, and not to those shares bought after (which Pope did). Latecomers are buying a hope that it'll be extended, not an obligation.

@lanoitar

Yes, exactly. I wrote about that previously:
https://thumbtackinvestor.wordpress.com/...-holdings/

But those who bought later though, may not necessarily be just simply hoping the offer extends to them as you mentioned.
As I've worked out, before the appeal was successful, the court would mandate that this situation be resolved. Because it is deemed oppressive.
So this means that even though the majority shareholders are NOT obliged to extend any offer to the other minorities, and even to POPE's shares bought AFTER the complaint was first brought up, they are obliged to resolve this situation somehow.


I've worked out the 3 scenarios this can turn out then.
The ball was in the majority shareholder's court to do something, and if they can't get an agreement with the minority shareholders, they'd have to go through arbitration. Either way, this gets resolved somehow. That's the catalyst.

But now that the courts are saying that it is NOT oppressive, then there's no pressure on the majority shareholders to resolve this. Status quo would suit them just fine.

The saga continues:  

Annuity & Re Life has since filed a notice of motion for leave to appeal to the Privy Council on 13 April 2017.

http://infopub.sgx.com/FileOpen/Notice%2...eID=448599

The offer will just lapse after extension ends. Price will likely fall as this will take even long to play out. Catalyst is far out of sight.

[hh488]

Any buddies still holding this counter?

As expected, price now dropped further from the offer price.  The question is: will the company compulsorily acquire the remaining shares? Presumably now that the free float still above 10% but I read somewhere in the Circular to the shareholders dated 3rd April abt the intention of the Offeror regarding the listing status, found in Page 43 :

http://infopub.sgx.com/FileOpen/Circular...eID=445957

Extracts:

The Offeror intends to privatise the Company and does not intend to preserve the listing status of the Company. Accordingly,

(a) the Offeror, if entitled, intends to exercise its rights of compulsory acquisition under the Bermuda Companies Act. In such a situation, Shareholders who did not accept the Offer will have their Shares compulsorily acquired and be paid an amount equivalent to the Offer Price; and
(b) in the event that the percentage of the total number of Shares held in public hands falls below 10%, the trading of Shares on the SGX-ST will be suspended pursuant to Rule 724, Rule 1105 or Rule 1303(1) of the Listing Manual. The Offeror does not intend to support any action or take any steps to maintain the listing status of the Company or to restore the free float requirement. Under this scenario, Shareholders who continue to hold on to the Shares will not be able to trade their Shares in the open market. 

However, in the event that the Company continues to meet the free float requirements under Rule 723 of the Listing Manual following the close of the Offer, the Company will remain listed and the Shares will continue to be traded on the SGX-ST....unquoted.


Can anyone able to shed some light for those still holding KCF shares ?

[desmondxyz]

Any buddies still holding this counter?

As expected, price now dropped further from the offer price.  The question is: will the company compulsorily acquire the remaining shares? Presumably now that the free float still above 10% but I read somewhere in the Circular to the shareholders dated 3rd April abt the intention of the Offeror regarding the listing status, found in Page 43 :

http://infopub.sgx.com/FileOpen/Circular...eID=445957

Extracts:

The Offeror intends to privatise the Company and does not intend to preserve the listing status of the Company. Accordingly,

(a) the Offeror, if entitled, intends to exercise its rights of compulsory acquisition under the Bermuda Companies Act. In such a situation, Shareholders who did not accept the Offer will have their Shares compulsorily acquired and be paid an amount equivalent to the Offer Price; and
(b) in the event that the percentage of the total number of Shares held in public hands falls below 10%, the trading of Shares on the SGX-ST will be suspended pursuant to Rule 724, Rule 1105 or Rule 1303(1) of the Listing Manual. The Offeror does not intend to support any action or take any steps to maintain the listing status of the Company or to restore the free float requirement. Under this scenario, Shareholders who continue to hold on to the Shares will not be able to trade their Shares in the open market. 

However, in the event that the Company continues to meet the free float requirements under Rule 723 of the Listing Manual following the close of the Offer, the Company will remain listed and the Shares will continue to be traded on the SGX-ST....unquoted.


Can anyone able to shed some light for those still holding KCF shares ?

U should answer this question urself...why u still holding it?

[hh488]

Hi Desmond

No, I'm not vested but thought this might give a trading opportunity if they decide to compulsorily delist it.

The risk is of course holding this baby indefinitely if continue to be listed.

[weijian]

hi hh488,
I took a look at the history of announcements by KCF and it seems like the offer has closed >1.5months ago. The offerer is not able to garner >90% of shares and so it cannot invoke the compulsory acquisition clause, and at the same time, there is still >10% liquidity + enough shareholders to remain listed.

http://infopub.sgx.com/FileOpen/Offer%20...eID=442145