Capitaland Investment Management

IPO
NAV: 1.36
Price: 2.12

2014
NAV: 1.84
Dividends distributed: 0.1275

So they are buying back at +10c from their selling price, after missing out 0.48c of appreciation from NAV and 0.1275 of dividends.

Or, you can see it as selling at 1.56x and buying at 1.21 BV...

So i sold u a company for 212M, watch it grew almost 30%+ (while it gave u "pathetic" dividends). Now, i want to buy it back from you at 222M. What do you think?

(14-04-2014, 11:42 PM)ksir Wrote: So i sold u a company for 212M, watch it grew almost 30%+ (while it gave u "pathetic" dividends). Now, i want to buy it back from you at 222M. What do you think?

It is a win-win deal.

Currently, not many is willing to buy CMA at price above $2.

I am aware of that. But the "similar" Mr Market was paying for 2.12 back then. So I am pointing out that that Mr Market dude is probably indeed irrational. I am vested though with below $2, so I don't really against the offer.

Just saying it's a horrible deal for Capitaland... they could've low balled.

A few rounds of low balls, and tadaa.. it'll be theirs anyway

(14-04-2014, 11:58 PM)piggo Wrote: Just saying it's a horrible deal for Capitaland... they could've low balled.

A few rounds of low balls, and tadaa.. it'll be theirs anyway

I must say i haven't been too impressed with what the new management is doing thus far. They are selling assets too eagerly at a loss or marginal profits but buying assets at a high price with unexciting yields aka buy high sell low. I'm quite sure they have the holding power to await selling non-core assets at more profitable prices, patience is a virtue.

(14-04-2014, 11:58 PM)piggo Wrote: Just saying it's a horrible deal for Capitaland... they could've low balled.

A few rounds of low balls, and tadaa.. it'll be theirs anyway

CapitaLand already owns around 65.3 per cent of CMA, cannot play low balls lah.

(14-04-2014, 11:42 PM)ksir Wrote: So i sold u a company for 212M, watch it grew almost 30%+ (while it gave u "pathetic" dividends). Now, i want to buy it back from you at 222M. What do you think?

It is a 1.5% coupon bond

And minorities cannot say they are being marginalised

Well packaged

(15-04-2014, 10:59 AM)specuvestor Wrote:

(14-04-2014, 11:42 PM)ksir Wrote: So i sold u a company for 212M, watch it grew almost 30%+ (while it gave u "pathetic" dividends). Now, i want to buy it back from you at 222M. What do you think?

It is a 1.5% coupon bond

And minorities cannot say they are being marginalised

Well packaged

I don't know how much exactly CMA's intrinsic value is.
But I am pretty sure (just from the simplistic PB + time value), Capitaland is getting the better out of this deal.
But the common voice in market is that the deal is pareto efficient.
Why so? Because we are used to be dictated by Mr Market price and not Intrinsic value??
To quote indirectly from Bershire letter:
The increase in NAV generally moving in the same direction with Intrinsic value (although not always and might be far off).

Capitaland is doing this offer because they think it is a good deal. Nobody do an offer thinking otherwise.

Question is whether OPMI think the deal is fair in view of their opportunity cost and structural issues from listing status to future dividend streams.

Mr Market gives u daily offers, but in a GO, he is shouting at you so it gets your attention. If it gets delisted Mr Market will become very quiet. As much as we try to ignore Mr Market, people forget he is no pushover unless you are a big fund or HNW... we are the OPMI.