Metro Holdings

[KopiKat]

17 million??? But if don't divest, the stake is worth more as of today........

Metro divested the 27% and JO had a total remeneration of S$17 millions for that year.

Stocker Wrote: Now the 27% is worth around S$1 Billion.

So, why so much pay for making such a bad decision???

The questions you may want to ask is,

1) Would Henry and Jannie Tay have worked as hard to make Hour Glass a success if they were not in full control? If not, Hour Glass may have remained a tiny operation and not be worth as much.

2) Would Henry and Jannie Tay have left to start another similar biz if Metro had not divested their stake to them? If so, same outcome as (1), worst case, maybe Hour Glass can't even compete / survive against Henry/Jannie Tay's new biz.

3) What did Metro do with the cash raised from this divestment (besides paying JO / his late father) a huge bonus? Did they use it to generate better/good/no returns? It'd appear that their strength is in properties and largely in China. Without the cash, they may not have been in the right place and right time to make all those investments in a China that was just starting to boom.

If you can answer the above, then we'd perhaps be better able to understand whether it's a good / bad decision.

Having said the above in defence of Metro, I'm also deadly against the controlling shareholders which'd been heavily rewarding themselves with huge bonuses (everytime they divest any asset and realise profits) and bringing in the 3rd generations into the company to bring continuity to enjoy this bonus scheme. Altho' shareholders do get paid a dividend plus the occassional special dividends, I see the 'O' family getting a much larger share.

I was vested aro' 2003-2007 from 50ct-70ct but I finally divested my last lot just below $1 (it did go above $1 after I sold). During that period, we were having one of the best and longest bull run here and Metro's value continued to be locked, except only to the controlling family (via huge bonuses). What I'd love to see here is someone like Oei Hong Leong coming in to buy at least a 20% stake to help unlock value, if I were to become vested again.