SMRT

[specuvestor]

Security now last only 15 years

I think this deal is pretty watershed on the govt's thinking of what is a reasonable margin for transport business in an operator model. I'm not sure how the profit collar works in reality ie for example does a one year bonus for staff pushing OM to below 3.5% qualify? But of course on the structure side transport companies can improve the ROE through capital management but without sizable assets it will be limited.

I think it is a good deal for the public consumer. I think the operator model is a good compromise between capex spending for public / social infrastructure vs Singapore Inc mentality.

but... but...S$1.68 is low leh...considering the 1b stuck...

i REJECT the offer!

Offer $1.88 pls!

Brattzz though we suspect Temasek will do the standard chicken dance and up the price next week or so, whether $1.68 or $1.78 is good price already under this new framework, which if u read between my lines that it's a good deal for the public consumers

I suspect that without the deal u would be staring at $1.38 instead

[brattzz]

ok thank u specuvestor, guess i should just be happy that i can get rid of this pesky SMRT shares!!

[PkNanas]

for Scheme of Arrangement, can Temasek vote in the Scheme in this case?

[opmi]

for Scheme of Arrangement, can Temasek vote in the Scheme in this case?

To Pass the SOA: 
2 tier approval

- more than 50% of NUMBERS of shareholders voting must vote FOR

- 75% of the shares voting must vote FOR

 correct?

Ya. Can Temasek vote???

[opmi]

Absent any conspiracy theories about future sweetheart deals for Temasek, it seems quite possible that Temasek is being ordered to do national service in this case, as the price is very high relative to future earnings under the NRFF.

Temasek was the big bene for the big dividends paid out during 'Cleopatra' reign. Money that was supposed to used for maintenance capex and buying over the rail assets.

[brattzz]

temasek own 54%, they can vote lah, else how to get 50% to vote FOR? when there are only 46% float in public hands? :O
Key to beat is 75%!!

[CityFarmer]

temasek own 54%, they can vote lah, else how to get 50% to vote FOR? when there are only 46% float in public hands? :O
Key to beat is 75%!!

http://infopub.sgx.com/FileOpen/Media%20...eID=413490

http://infopub.sgx.com/FileOpen/Joint%20...eID=413484

Can Temasek vote? No 

In detail, the following snippet from above link. It is common to abstain from voting, to seek exemptions of rule.
------------
(a) the Scheme is exempted from Rules 14, 15, 16, 17, 20.1, 21, 22, 28, 29, 33.2 and
Note 1(b) on Rule 19 of the Code, subject to the following conditions:
(i) the common substantial shareholder of the Offeror and the Company abstain
from voting on the Scheme;
(ii) the Offeror and its concert parties abstain from voting on the Scheme;
(iii) the directors of the Company who are also directors of the Offeror abstain
from making a recommendation on the Scheme to the Scheme Shareholders;

(not vested)

[brattzz]

alamak! like tat means this deal can be no-go!!!

okay! REJECT!!! Keep my pesky SMRT shares forever!

[CityFarmer]

alamak! like tat means this deal can be no-go!!!

okay! REJECT!!! Keep my pesky SMRT shares forever!

SOA, is a simpler all-or-none option, but with a higher risk of failure. Minority shareholders are definitely having a louder voice in scheme meeting.

One important point to note, based on latest disclosures, the illustrated PER range is 34.1x-64.2x. I reckon, rejecting an offer with PER of >34, doesn't sound a good idea to me 

------
Scheme Price represents implied FY2016 price-to-earnings ratio (“PER”) range of 34.1x –64.2x, based on illustrative range of SMRT Trains EBIT margins. Based on illustrative EBIT margin range of 0.9% –5.9% under the NRFF(2) assumptions, SMRT’s illustrative FY2016 PATMI is S$39.9 –75.2 million

(not vested)

[ryan]

Just like to point out that ComfortDelgro owns 75% of SBS Transit and neither Temasek nor GIC is the top shareholder of ComfortDelgro. It is unlikely that SBST will be privatised by the government.

Can Temasek buy from ComfortDelgro?

Perhaps it is better to consolidate all rail operations (SBS, SMRT) under one private company so that our small core train engineering pool can be better utilized. With the doubling of rail network by 2030s, we need only one "best-in-class" train operator to service the whole network. Their performance should be benchmark against the top 4 operators worldwide, and the KPIs publish yearly by LTA.