(01-04-2017, 01:38 AM)opmi Wrote: [ -> ] (01-04-2017, 12:20 AM)TTTI Wrote: [ -> ] (31-03-2017, 06:09 PM)opmi Wrote: [ -> ]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.