Hello to all,
this is my maiden post even though I've been following the forum since its wallstraits days. I'm thankful to have the opportunity to learn form fellow forummers and to share my humble views.
What are your opinions on the madatory unconditional cash offer of $0.465 per share for Low Keng Huat?
Based on the financial statements for period ended 31 July 2010, the company has no debt and a cash hoard of $161 million. This works out to a cash/share of $0.218.
Effectively the offerror is paying $0.247/share ex-cash for a good and viable business. Given an EPS of $0.0385 (annualised $0.154/share), the offerror is merely offerring to buy over minority shareholders at a very low PE of 1.6x ex-cash. Would this be a fair price to pay? Given that the offerror intends to keep the listing status of the company, the pertinent question would be: how many serious investors would be willing to let go of their stake?
this is my maiden post even though I've been following the forum since its wallstraits days. I'm thankful to have the opportunity to learn form fellow forummers and to share my humble views.
What are your opinions on the madatory unconditional cash offer of $0.465 per share for Low Keng Huat?
Based on the financial statements for period ended 31 July 2010, the company has no debt and a cash hoard of $161 million. This works out to a cash/share of $0.218.
Effectively the offerror is paying $0.247/share ex-cash for a good and viable business. Given an EPS of $0.0385 (annualised $0.154/share), the offerror is merely offerring to buy over minority shareholders at a very low PE of 1.6x ex-cash. Would this be a fair price to pay? Given that the offerror intends to keep the listing status of the company, the pertinent question would be: how many serious investors would be willing to let go of their stake?