Eden advisors post - Special situations (M&A) in the local SG market

More
8 years 2 months ago #22944 by Mel
Some people must have gottten wind of Minzhong's case coming to fruition, otherwise why did the share price jumped so high? haha... 94.5 cents. GO very likely to me after seeing Lin put down his earnest sum of S$40m. Look out for HTL next.

Please Log in or Create an account to join the conversation.

More
8 years 2 months ago #22946 by Bobby64
Interesting cases. Ultimately one must note that the market is giving a certain discount to the buyout price. Even though the fact and proposal is already tabled, one must consider the sponsor (funding party) that is doing the buyout. The stronger the sponsor (with its financing) higher the probability of buyout.

In addition, as learned in the CFA curriculum. If it is a cash offer - the buyer is bullish about the synergy. If they use shares - it means they are less certain.

About China Minzhong - One will notice only 300,000 shares were traded pushing up CMZ by 20%. This is due to the very illiquid nature of the stock. It does appear that the due dilligence has been completed (see sgx announcement on 31/03)

HTL - I am not too sure about HTL. While there has been approval by the acquirer's shareholders and that it is quite unlikely that the chinese authorities (3 in total) would disapproved of the deal....the downside risk can be quite high given that it is not exactly a company that is profit positive. Furniture is quite a tough industry to be in. That being said, the volume trade on it appears to be fairly decent for trading.

Lastly, I like to highlight a new target to the fine readers on nextinsight - Ascendas H Trust on my blog
edenadvisors.blogspot.sg/2016/03/special...tion-m-ascendas.html

I do think there is some strong upside and limited downside given the REIT nature. Feel free to comment.

Please Log in or Create an account to join the conversation.

More
8 years 2 months ago #22957 by Mel
Bobby, perhaps you are over-emphasising the risk of the privatisation not materialising. The share price has rebounded (+6 cents) to 78 cents.

You said "....the downside risk can be quite high given that it is not exactly a company that is profit positive. Furniture is quite a tough industry to be in. "

-- These are factors that the suitor has clear sight of from the start and are not at all hidden risks. The suitor is also in the same industry and is surely looking for complementary strengths that HTL offer. Just my 2 cents.

Please Log in or Create an account to join the conversation.

More
8 years 1 month ago #22990 by Garak
Share price is up +3 cts. HTL had just announced that another Chinese authority has approved takeover by Yihua.
$1.00 takeover offer. Share prx now 78 cts. Still got 22 cts upside.

Please Log in or Create an account to join the conversation.

More
8 years 1 month ago #23013 by zane
WE will likely hear of the 3rd approval soon, and then it's no longer a delusional dream. HTL share price will be in hot demand, just as some testosterone-overloaded guys crave for steak and sex.

Please Log in or Create an account to join the conversation.

More
8 years 4 weeks ago #23033 by Garak
HTL reported US$3.8 m in net profit for 1Q this year.
If we annualise it, that's usd15.2 million for the year.

I work out it would mean a PE of about 17.7X.

There are 3-year profit guarantees from BEM Holdings (a vehicle of HTL's controlling shareholders) which agreed to compensate and pay to Yihua Timber:
1. Amt equivalent to the shortfall if FY16 PAT is < US$25m.

The 2q, 3q, 4q have to produce much higher profits than US$3.8 m for BEM to meet the profit targets.

Please Log in or Create an account to join the conversation.

Time to create page: 0.247 seconds
Powered by Kunena Forum
 

We have 417 guests and no members online

rss_2 NextInsight - Latest News