HTL

[lanoitar]

Final offer price is $1 and the pre-condition doesn't look very stringent..but Mr Market is trading @ 0.66 (-0.04, -5.71%) right now?

The remaining 3 pre-conditions aren't stringent, but the profit targets are:

Subject to completion of the Proposed Acquisition, BEM agreed to compensate and pay to Yihua Timber:
1. Amt equivalent to the shortfall if FY16 PAT is < US$25m
2. Amt equivalent to the shortfall if FY17 PAT is < US$27.5m
3. Amt equivalent to the shortfall if FY18 PAT is < US$30.25m

Total profit guaranteed fr FY16 to FY18 = US$82.75m (or S$116m).

HTL's PAT for the last 5 years:
FY15 = -S$1.6m, FY14 = S$5.3m, FY13 = S$0.69m, FY12 = S$7.66m, FY11 = S$5.8m

Unless we can assume BEM is doing charity and shouldering this profit guarantee alone, I would imagine that minorities are on the hook. If HTL only breaks even for the next 3 FY's, shareholders will be looking at an offer that's equivalent to $416.6m - $116m = S$300.6m, or 72cents/share (not too far away from the last done price).

Seems to me that Yihua has purposely inflated the acquisition price & PAT targets, so that they can transfer out a big sum of money, and then get it back later. I'll leave it to your imagination as to why they are doing so.