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It may be better to take it private if they dont behave like they are running a public-listed company. Many mid-small companies also behave likewise. So be careful when u put money in these counters.
(15-03-2014, 10:57 AM)kikababoo Wrote: [ -> ]agree with u on the legal definition of insider trading part. i tend to use this term quite widely lol. anyone know if the run up was caused by temasek collecting more shares? anw to check? i thought tem would need to make some filling if it acquire more shares on open-market transactions.

It is fair to raise concern on the possibility of insider trading. It is also fair to raise doubt on the adequacy of the current law in SFA. But it is unfair to make such allegation without reasonable ground.

A base warning is issued. Base warning serves as reminder, and doesn't carry any restriction.


P.S. :
In fact, I did have concern on insider trading on the trio saga. I am also seriously doubt on the adequacy of the current law in SFA to curb the unfair tradings in Singapore. I have put the topic into my reading list, and hopefully I can clear my doubt soon.


Olam share price increase ‘within general market view’:SGX

Sharp increase in price had led some market watchers to speculate whether news had leaked of a Temasek buyout offer

SINGAPORE--The sharp increase in Olam International’s share price ahead of last week’s buyout offer by a Temasek-led consortium was likely within the general market view of the stock, according to the Singapore Exchange (SGX).

In a statement aiming to clarify the possible reasons for the increase, SGX noted that from Feb 3 the commodities giant’s share price increased 34.8 per cent to just under S$2.00, more than peers such as Wilmar International, which rose 11.2 per cent over the same period, and Noble Group, which increased 12.6 per cent. Over those weeks, the Straits Times Index rose 2.3 per cent.

The significant increase in Olam’s price led some market watchers to speculate whether information had leaked about the offer, which was pitched at S$2.23 per share.

In a statement today (March 16), SGX said that while it does not prescribe a view of value or pricing of stocks, it noted that of the 13 analysts who issued reports on Olam in February, seven raised their target price by an average of 10.4 per cent with the highest increase being 21.4 per cent. The 13 analysts had target prices of S$1.50 to S$2.00 for Olam.

In the case of Wilmar, eight analysts raised their target price by an average of 2.6 per cent with the highest increase being 4.8 per cent, SGX pointed out. For Noble, one analyst raised the target price in February.

“Trading in these three stocks were within the price ranges set out in the research reports, suggesting they were trading within the general market view of these stocks with Olam shares reflecting a more positive market view,” the SGX said.

The statement went on to say that SGX takes a serious view of all market misconduct in breach of the Securities and Futures Act, including potential insider trading and manipulation activities.

“We will spare no effort in conducting investigations on possible transgressions and will cooperate with regulatory agencies to enforce the law against offenders,” SGX said.
The MW responded on the Temasek's offer...

Muddy Waters’ Block gives Olam credit for fixing some issues

Olam International deserves praise for addressing some of the shortcomings in its business, according to Carson Block, who two years ago said the shares were worthless.

The Singapore-based commodity trader saw its stock rise 12% on Friday after a unit of the nation’s state-owned investment company offered to buy it in a deal that values Olam at $5.3 billion. In November 2012, short-seller Block compared the company to failed American energy merchant Enron Corp., saying it would probably fail.

“Olam gets credit for taking steps to mitigate some of the issues we identified,” Block wrote in an e-mail to Bloomberg News today. “The Singapore sovereign wealth fund’s timing is interesting given that Olam has $1.2 billion of debt maturing this year and is still burning cash, and that the stock has inexplicably outperformed in the past month.”

Block, who founded Muddy Waters LLC, announced he was betting against Olam at an investor conference in London in November 2012. Since then, the stock is up 14% through March 12, aided by a gain of 35% since the start of February. During that stretch, Olam’s Singapore-traded equities have climbed on 18 of 26 days before being halted earlier today before news of the takeover offer was disclosed.

Block declined to say whether he is still short the stock.
Very likely that Temasek is buying over OLAM for food security of nation. Recall food (e.g rice) export ban imposed by various countries (e.g Thailand) in 2007/2008 amid soaring agri commodity price.

Nomura advises Olam shareholders to reject Temasek unit's offer

Japanese financial services group Nomura on Wednesday advised Olam International shareholders to reject Temasek unit Breedens' takeover offer of S$2.23 a share, saying it believed the commodities firm was worth around S$2.50 a share.

Nomura estimates that Olam's earnings could grow by more than 20 per cent per annum in the next three years.

It added that Temasek's emergence as Olam's majority shareholder was positive for shareholders, as this would help reduce concerns over the firm's access to funds, which is key in global supply chain businesses.

Temasek's offer price for Olam -- which works out to about 13.3 times estimated earnings for 2014 -- was not expensive as it was in line with recent transactions in the agriculture business, the Japanese firm added.
Latest is that Sime Darby wants to be part of Consortium. From today's Business Times, it will be hilarious, if Temasek takes it private and then sells it for say 6 billion odd to Sime Darby
(14-03-2014, 08:31 PM)tanjm Wrote: [ -> ]Olams 6.75% bond ramped up to 1.025 today.

If Temasek ends up with a substantial stake in Olam (and there's no reason to believe most people won't take up its offer), then Olam's effective credit rating has to improve. Currently at 1.025, it has a yield to maturity of 6.24%. Temasek's own bonds are just tens of basis points above USD treasuries.

The gap should close. Even though Olam is a separate entity, it's hard to see how Temasek would not backstop its billion dollar investment. Worth getting some and holding to maturity even if for some strange reason, the yield doesn't go down (price go up) for the temasek backstop. Even at a price of 1.1, the yield is still 4%.

I bought a bunch today as a matter of fact when I saw the news.

Last price done for the bonds is 1.04 (yield > 5% still) from below 1 before this deal was announced. When I first saw the news, I basically doubled down on my holdings.

The capital gain is nice but not extraordinary. What's more significant is that i was including this bond in my equity portfolio. With this news , I figure its credit worthiness has improved to the point I can move it to my fixed income side of things and free up capital for equity.

I figure the price can still move up a Little more.
Temasek's offer for Olam fair and reasonable: Financial adviser
Published on Apr 18, 2014 1:32 AM

By Jonathan Kwok

AN INDEPENDENT financial adviser has deemed Temasek Holdings' $2.23-per-share offer for Olam International "fair and reasonable".

The views of Rothschild (Singapore) were backed by Olam's independent directors in a circular to shareholders yesterday.

The independent directors suggested that some investors could consider selling shares on the open market or tendering them to Temasek.

These include shareholders who believe that a higher offer may not be made and those who feel that trading liquidity may fall even if Olam remains listed.

However, investors who believe a higher offer may be made could consider retaining a portion or all of their shares, said the independent directors in the circular, which also contained the Rothschild assessment.

Temasek Holdings unit Breedens Investments offered last month to buy all of Olam's shares from its minority shareholders at $2.23 each, a deal valuing Olam at $5.45 billion.

Temasek said it intends to keep Olam listed, but kept the option to reassess its position if the minimum public float requirement of 10 per cent is not met.

Breedens Investments also offered to buy all the outstanding convertible bonds and warrants issued by Olam, a supply chain manager and processor of agricultural produce.

The offer for warrant holders was also "fair and reasonable", noted Rothschild but said the offer for convertible bonds was "not fair and not reasonable" on a "see-through" basis.

The independent directors concurred with Rothschild's assessment.

"Accordingly, the independent directors recommend that bondholders reject the convertible bonds offer," said the circular.

The Code on Takeovers and Mergers says parties that make general offers for companies must also make an appropriate offer or proposal for holders of instruments that can be converted to shares, like warrants and convertible bonds.

The "see-through" method is a way to value such instruments. It is normally used to determine the appropriate offer price for such instruments, says the Takeover Code.

Recent offers for convertible bonds have also used the "see-through" method to determine an offer price.

In Olam's case, Temasek offered US$850.37 (S$1,062.55) for every US$1,000 principal amount of convertible bonds, a figure derived from the "see-through" method.

The instruments are trading slightly above US$1,000, according to Bloomberg data.

So holders who wish to dispose of the instruments can choose to sell them through the market.
Do agree that the offer is a fair price for existing shareholders. While I have not gone to the extent of putting a figure on the value of the company.Olam has been posting negative OCF due to the changes in its working capital and thus more debts may be needed for its expansion in times when Fed expects I/r rates to increase.

The fact the company has been growing while taking on so much debts to fuel its expansion; will mean eventually it will be severely hit by interest rate hikes in the near future. This means potentially lower EPS for shareholders. Becoming wholly owned by a sovereign wealth fund will lower the perceived credit risk Olam has in the eyes of the banks and will enable it to obtain more favourable interest rates for its loans.