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http://www.theedgemarkets.com/sg/article...h-offshore

SINGAPORE (Jan 14): Chuan Hup Holdings ( Financial Dashboard), the second largest shareholder of CH Offshore ( Financial Dashboard) with a 23.76% stake, said it will reject the offer by Falcon Energy to buy out the rest of the company at 49.5 cents.

Falcon Energy is the largest shareholder of CH Offshore with a 29.1% stake.

"The Board wishes to announce that it has reviewed the Offer Document and the Offeree Circular and that after due consideration it has decided that, in the best interest of the Company's shareholders, it will not accept the Offer," said Chuan Hup in a regulatory filing.

On Dec 11, Falcon Energy made a cash offer for all the issued and paid-up shares in CH Offshore. The offer price was 6.45% higher than CH Offshore’s last traded price of 46.5 cents before the announcement.

However, CH Offshore’s share price continued to climb after the offer. The stock closed at 51 cents today.

Based on the 705.1 million shares of CH Offshore issued, Falcon Energy’s offer values the company at $349 million.

Falcon Energy said it had conducted a strategic review of its existing stake in CH Offshore and believed that gaining control of the latter will offer the group an attractive platform to build on its businesses in offshore support services.

The company said it intends to maintain the listing of CH Offshore following successful completion of the takeover offer. It may however undertake a review of the CH Offshore and may embark on programmes to optimise efficiency in the business operations and the capital management of the enlarged group.

For the quarter ended Sept 30, CH Offshore earned US$5.6 million, down from US$7.4 million a year earlier despite a 15% rise in revenue. The results in the previous quarter were boosted by a write-back of provisions.
The circular to CHO shareholders touch on a few things, including RNAV and litigation at UK court. Apparently the independent advisor valued CHO around 63 cents. Of course it doesn't mean the share price will reach 63 cents anytime soon but in a nutshell, the offer is unreasonable and unfair.
CHH purchased 6.388 million shares from open market today and increased its shares in CHO to slightly above 24%. Purchase price is higher than Falcon's offer price. Is CHH trying to force Falcon to extend and raise the offer? Or best still for investors, a counter offer on the card?
I guess Falcon will cross 30% by buying in the open market at higher price, hence revising offer price up.
Just need a few %.

After that, the 2% creeping rule will apply for CHH and Falcon. Whoever bust that 2%, will have to make offer.
ROUND 1
Party Peh +0.9% ---> increases from 35.1% to 36%
Party Tan +0.0% ---> remains at 29.1% (buying Falcon shares doesn't count...)
Chuan Hup should counter offer $0.595. Squeeze Falcon to shame.
^^ don't know about 'should or should'

Now CHH call it the shots with 36%. Falcon
is playing 2nd fiddle.
with low oil prices of USD46 to USD58, CHO earnings will be badly hit in the next 6 to 12 months. It earnings may even drop to eps of 1.3cts in the next 12 month. Think 51cts is fair value already.

Personal opinion only.
Offer closing date extended two more weeks, to 9 Feb:

http://infopub.sgx.com/FileOpen/Extensio...eID=332596
Falcon has to consider the 12 months or 6 months time bar if it failed in this bid.
During the time bar, Falcon cannot make counter-offer even if CH makes an offer.
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