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15-12-2012, 09:13 AM
BT Article:
PUBLISHED DECEMBER 15, 2012
Stake news lifts shares of SC Global, Wheelock
Analyst estimates of SC Global's revalued net asset value vary widely
BYMINDY TAN PRINT |EMAIL THIS ARTICLE
MR CHEONG
Wheelock's purchase price of about $1.81 a share is a shade higher than the $1.80 that he is offering to take SC Global private - PHOTO: SIMON CHEONG
SC Global Developments' shares rose 8.5 per cent yesterday on news that Wheelock Properties had raised its stake in the Simon Cheong-controlled company through the purchase of 1.067 million shares.
The stock shot to an intra-day high of $2.06 before closing at $1.975, up 15.5 cents on the day. Shares in Wheelock, whose stake in SC Global inched up to about 16.09 per cent following the open-market acquisition of additional shares, closed 6.5 cents, or 3.3 per cent, higher at $2.04.
Wheelock's purchase price of about $1.81 a share is a shade higher than the $1.80 that Mr Cheong is offering to take SC Global private.
"We believe that Wheelock is raising its stake in SC Global for a higher offer as the current offer price is still below their initial investment cost," UOB-Kay Hian said in a report yesterday.
Wheelock said late on Thursday that "in our assessment, the current share price represents a discount of some 40-50 per cent of RNAV (revalued net asset value), and we would be unable to buy property assets directly at anything like these prices". SC Global ended trading at $1.82 on Thursday.
Wheelock Properties, formerly known as Marco Polo Developments, is a subsidiary of Wheelock and Company Ltd, a major Hong Kong group.
In a statement yesterday advising shareholders to exercise caution when dealing in shares of the company, SC Global said that "statements by various stakeholders on their assessment of the offer . . . are likely to be personal to the writers or persons who had expressed them, and might not have taken into account the individual circumstances and needs of the readers".
"Shareholders are advised to treat with caution any figures or other data provided by third parties who are not in possession of property-specific details pertaining to each of the assets and liabilities of the company," it said.
Analyst estimates of SC Global's RNAV vary widely. AM Fraser values it at $1.98 a share, DMG and Partners Security at $3.65, and Maybank Kim Eng at about $4.00.
SC Global has appointed PrimePartners Corporate Finance as independent financial adviser to the company's independent directors on the offer.
An analyst, who declined to be named, said: "There's a lot of upside in the RNAV. Obviously, you can't expect them to get 100 per cent of the RNAV payout. Allgreen's the most recent and relevant, (and was taken private) at about 19 per cent discount, which would suggest that a pricing of mid- to high-$2 as fair value here. Given that Simon Cheong has a majority stake, you probably can't get that, but we still think (a fair offer price) should be above $2."
He added: "Mr Cheong has a strong incentive to strike a deal with the remaining shareholders who are holding out for a higher price (since) if he can get support of the bigger shareholders, he can go private and eliminate the penalties."
Some market watchers have speculated that SC Global's bid to take the property development company private could stem from the fact that if the company is fully owned by Singapore citizens, its residential projects may no longer be under Qualifying Certificate (QC) conditions, subject to government approval.
"There is a difference between a 'developer going private' and the definition of a 'Singapore company' under the Residential Property Act (RPA)," said a spokesman from the Ministry of Law. "In general, if a foreign company becomes a Singapore company as defined under the RPA, it can apply to the Singapore Land Authority (SLA) for a Clearance Certificate to purchase residential properties henceforth.
"SLA will determine if the applicant company meets the requirements for a Singapore company under the RPA. If an application is made, SLA will also determine if the Qualifying Certificate(s) issued for the purchase of residential land when the applicant was a foreign company would be cancelled," said the ministry.
Phillip Securities analyst Bryan Go suggested that existing shareholders adopt a wait-and-see approach.
"There is a potential that Simon Cheong could raise his offer price because the market price is already higher and he can't do market purchase," said Mr Go.
Said Sarah Wong, research analyst at AM Fraser: "I reckon the best-case scenario for Simon Cheong is to have SC Global delisted with a free float below 10 per cent first, before buying out other foreign shareholders' stakes. If delisting doesn't come to pass, it follows naturally then that he'd most likely have to increase his offer."
Even as Wheelock signals to the market that it thinks Mr Cheong's offer is too low, some think Wheelock's latest action helps Mr Cheong's bid to take the company private. This is because the counter is vulnerable to delisting once the free float falls below 10 per cent.
Mr Cheong's total control in SC Global stands at over 60 per cent. Including the stakes held by Wheelock and executive director David Tsang, Mr Cheong needs to get his hands on approximately 11 per cent more of the company's shares to reach the 90 per cent threshold.
Said a market watcher: "The worst-case scenario for retail investors is that SC Global stays listed, but liquidity gets shrunk. At some point, this counter is destined to be delisted. . . What's propping his price up now is the privatisation offer, so even if the offer fails, he can continue to nibble up shares until he hits the 90 per cent mark."
.Additional reporting by Felda Chay
ST Article:
SC GLOBAL PRIVATISATION
Wheelock swoop hits tycoon's plan
Purchase of over 1m shares sends stock soaring above his buyout offer
Published on Dec 15, 2012
By Magdalen Ng
THE move by Wheelock Properties to buy more than one million SC Global shares on the open market on Thursday has hit plans by property tycoon Simon Cheong to privatise the firm.
The share swoop took Wheelock's holding to 16.09 per cent and sent SC Global stock soaring 15.5 cents, or 8.52 per cent, to $1.975 yesterday.
That is well above Mr Cheong's buyout offer of $1.80 per share.
Listing rules prevent Mr Cheong from buying shares on the open market above his offer price - so he either has to hold fire or raise that buyout offer.
Mr Cheong, chairman and chief executive of SC Global, launched a $745million cash offer for all the remaining ordinary shares of the luxury property developer last week.
He has since increased his stake to more than 60per cent.
About 22per cent of SC Global shares are still in the public float, but if this falls below 10per cent, the stock may be suspended under Singapore Exchange (SGX) rules.
By the same token, a firm cannot be delisted if the public float is above 10 per cent.
Wheelock's 16.09 per cent stake is not considered in the public float because the firm is deemed a substantial shareholder, as its holding exceeds 5 per cent.
Wheelock's share-buying seems to be indicating that the offer of $1.80 is too low.
In its announcement of its acquisition on Thursday, it noted that SC Global's share price "represents a discount of some 40 to 50 per cent of (SC Global's) revalued net asset value".
It also said: "We would be unable to buy property assets directly at anything like these prices."
An analyst who declined to be named told The Straits Times: "Wheelock probably recognises the value in SC Global's land bank.
"Wheelock has not been making many physical investments in recent years, so this stake in SCGlobal will give it exposure to Singapore's high-end residential market."
Technically, the more shares Wheelock buys on the open market, the fewer remain in the public float, which helps Mr Cheong's privatisation bid.
But if Wheelock's 16.09 per cent stake could be deemed as being part of the public float, then Mr Cheong's buyout could be stymied because a firm cannot be delisted if its public float is above 10 per cent.
Market watchers say the logical next step for Wheelock Properties may be to ask the SGX to consider its holding as part of the public float.
Rodyk & Davidson partner Ng Eng Leng noted that he has yet to hear of such a waiver being granted or even applied for.
But if Wheelock manages to achieve this, its 16.09 per cent stake will effectively prevent SCGlobal's delisting because the shares in the public float will always be more than 10 per cent.
The SGX was unable to reply by press time.
SC Global yesterday cautioned shareholders about the assessments and opinions about the buyout in the media.
"The board notes that many of (these) views are likely to be personal to the writer... and might not have taken into account the individual circumstances and needs of the readers," it said.
"Shareholders are advised to treat with caution any figures or other data provided by third parties who are not in possession of property specific details pertaining to... the company."
songyuan@sph.com.sg
PUBLISHED DECEMBER 15, 2012
Stake news lifts shares of SC Global, Wheelock
Analyst estimates of SC Global's revalued net asset value vary widely
BYMINDY TAN PRINT |EMAIL THIS ARTICLE
MR CHEONG
Wheelock's purchase price of about $1.81 a share is a shade higher than the $1.80 that he is offering to take SC Global private - PHOTO: SIMON CHEONG
SC Global Developments' shares rose 8.5 per cent yesterday on news that Wheelock Properties had raised its stake in the Simon Cheong-controlled company through the purchase of 1.067 million shares.
The stock shot to an intra-day high of $2.06 before closing at $1.975, up 15.5 cents on the day. Shares in Wheelock, whose stake in SC Global inched up to about 16.09 per cent following the open-market acquisition of additional shares, closed 6.5 cents, or 3.3 per cent, higher at $2.04.
Wheelock's purchase price of about $1.81 a share is a shade higher than the $1.80 that Mr Cheong is offering to take SC Global private.
"We believe that Wheelock is raising its stake in SC Global for a higher offer as the current offer price is still below their initial investment cost," UOB-Kay Hian said in a report yesterday.
Wheelock said late on Thursday that "in our assessment, the current share price represents a discount of some 40-50 per cent of RNAV (revalued net asset value), and we would be unable to buy property assets directly at anything like these prices". SC Global ended trading at $1.82 on Thursday.
Wheelock Properties, formerly known as Marco Polo Developments, is a subsidiary of Wheelock and Company Ltd, a major Hong Kong group.
In a statement yesterday advising shareholders to exercise caution when dealing in shares of the company, SC Global said that "statements by various stakeholders on their assessment of the offer . . . are likely to be personal to the writers or persons who had expressed them, and might not have taken into account the individual circumstances and needs of the readers".
"Shareholders are advised to treat with caution any figures or other data provided by third parties who are not in possession of property-specific details pertaining to each of the assets and liabilities of the company," it said.
Analyst estimates of SC Global's RNAV vary widely. AM Fraser values it at $1.98 a share, DMG and Partners Security at $3.65, and Maybank Kim Eng at about $4.00.
SC Global has appointed PrimePartners Corporate Finance as independent financial adviser to the company's independent directors on the offer.
An analyst, who declined to be named, said: "There's a lot of upside in the RNAV. Obviously, you can't expect them to get 100 per cent of the RNAV payout. Allgreen's the most recent and relevant, (and was taken private) at about 19 per cent discount, which would suggest that a pricing of mid- to high-$2 as fair value here. Given that Simon Cheong has a majority stake, you probably can't get that, but we still think (a fair offer price) should be above $2."
He added: "Mr Cheong has a strong incentive to strike a deal with the remaining shareholders who are holding out for a higher price (since) if he can get support of the bigger shareholders, he can go private and eliminate the penalties."
Some market watchers have speculated that SC Global's bid to take the property development company private could stem from the fact that if the company is fully owned by Singapore citizens, its residential projects may no longer be under Qualifying Certificate (QC) conditions, subject to government approval.
"There is a difference between a 'developer going private' and the definition of a 'Singapore company' under the Residential Property Act (RPA)," said a spokesman from the Ministry of Law. "In general, if a foreign company becomes a Singapore company as defined under the RPA, it can apply to the Singapore Land Authority (SLA) for a Clearance Certificate to purchase residential properties henceforth.
"SLA will determine if the applicant company meets the requirements for a Singapore company under the RPA. If an application is made, SLA will also determine if the Qualifying Certificate(s) issued for the purchase of residential land when the applicant was a foreign company would be cancelled," said the ministry.
Phillip Securities analyst Bryan Go suggested that existing shareholders adopt a wait-and-see approach.
"There is a potential that Simon Cheong could raise his offer price because the market price is already higher and he can't do market purchase," said Mr Go.
Said Sarah Wong, research analyst at AM Fraser: "I reckon the best-case scenario for Simon Cheong is to have SC Global delisted with a free float below 10 per cent first, before buying out other foreign shareholders' stakes. If delisting doesn't come to pass, it follows naturally then that he'd most likely have to increase his offer."
Even as Wheelock signals to the market that it thinks Mr Cheong's offer is too low, some think Wheelock's latest action helps Mr Cheong's bid to take the company private. This is because the counter is vulnerable to delisting once the free float falls below 10 per cent.
Mr Cheong's total control in SC Global stands at over 60 per cent. Including the stakes held by Wheelock and executive director David Tsang, Mr Cheong needs to get his hands on approximately 11 per cent more of the company's shares to reach the 90 per cent threshold.
Said a market watcher: "The worst-case scenario for retail investors is that SC Global stays listed, but liquidity gets shrunk. At some point, this counter is destined to be delisted. . . What's propping his price up now is the privatisation offer, so even if the offer fails, he can continue to nibble up shares until he hits the 90 per cent mark."
.Additional reporting by Felda Chay
ST Article:
SC GLOBAL PRIVATISATION
Wheelock swoop hits tycoon's plan
Purchase of over 1m shares sends stock soaring above his buyout offer
Published on Dec 15, 2012
By Magdalen Ng
THE move by Wheelock Properties to buy more than one million SC Global shares on the open market on Thursday has hit plans by property tycoon Simon Cheong to privatise the firm.
The share swoop took Wheelock's holding to 16.09 per cent and sent SC Global stock soaring 15.5 cents, or 8.52 per cent, to $1.975 yesterday.
That is well above Mr Cheong's buyout offer of $1.80 per share.
Listing rules prevent Mr Cheong from buying shares on the open market above his offer price - so he either has to hold fire or raise that buyout offer.
Mr Cheong, chairman and chief executive of SC Global, launched a $745million cash offer for all the remaining ordinary shares of the luxury property developer last week.
He has since increased his stake to more than 60per cent.
About 22per cent of SC Global shares are still in the public float, but if this falls below 10per cent, the stock may be suspended under Singapore Exchange (SGX) rules.
By the same token, a firm cannot be delisted if the public float is above 10 per cent.
Wheelock's 16.09 per cent stake is not considered in the public float because the firm is deemed a substantial shareholder, as its holding exceeds 5 per cent.
Wheelock's share-buying seems to be indicating that the offer of $1.80 is too low.
In its announcement of its acquisition on Thursday, it noted that SC Global's share price "represents a discount of some 40 to 50 per cent of (SC Global's) revalued net asset value".
It also said: "We would be unable to buy property assets directly at anything like these prices."
An analyst who declined to be named told The Straits Times: "Wheelock probably recognises the value in SC Global's land bank.
"Wheelock has not been making many physical investments in recent years, so this stake in SCGlobal will give it exposure to Singapore's high-end residential market."
Technically, the more shares Wheelock buys on the open market, the fewer remain in the public float, which helps Mr Cheong's privatisation bid.
But if Wheelock's 16.09 per cent stake could be deemed as being part of the public float, then Mr Cheong's buyout could be stymied because a firm cannot be delisted if its public float is above 10 per cent.
Market watchers say the logical next step for Wheelock Properties may be to ask the SGX to consider its holding as part of the public float.
Rodyk & Davidson partner Ng Eng Leng noted that he has yet to hear of such a waiver being granted or even applied for.
But if Wheelock manages to achieve this, its 16.09 per cent stake will effectively prevent SCGlobal's delisting because the shares in the public float will always be more than 10 per cent.
The SGX was unable to reply by press time.
SC Global yesterday cautioned shareholders about the assessments and opinions about the buyout in the media.
"The board notes that many of (these) views are likely to be personal to the writer... and might not have taken into account the individual circumstances and needs of the readers," it said.
"Shareholders are advised to treat with caution any figures or other data provided by third parties who are not in possession of property specific details pertaining to... the company."
songyuan@sph.com.sg