Kingboard Copper - Special Situation

In a delisting offer, would there be an independent financial adviser appointed? I would expect so.

Generally yes, to advise the minorities. Have to wait for further announcement (if any).

Expect share buyback to kick in tomorrow. Hope the minorities will stay put and refrain from selling. Court appeal hearing will commence on next Monday. I would expect appeal decisions to be swiftly delivered and, if rejected, they have to contend with a buyout offer for the Petitioner. This will make the case interesting.

Hope that more buyers will come out next week to push the price beyond the delisting offer of 40 cents.

The huge outcry by Minorities over the buyout offer of 40 cents is expected. Such continuing irrational behavior of the controlling shareholder, Excel First Investments (EFI), is baffling but unsurprising – just read the Court’s and EY’s findings.

Given this low-ball buyout attempt, I believe EFI has seriously shot itself on its own foot.

Its action now may constitute “Contempt of Court” as the Appeal Hearing commences tomorrow. Please note that KB is charged under section 111 – involves a “Class Remedy” for all shareholders.

The Court hearings in 1Q last year, subsequent to the Bermuda Supreme Court judgements, involved legal principles governing the valuation of shares (for buyout of Petitioner and other Minorities who may wish to join in on terms similar to the Petitioner). Except for one short announcement on 25 April concerning this matter, KB has not updated its shareholders on further progress and outcome of these hearings.

In the interest of justice and fair play for minority shareholders, I hope to see 3 developments arising from EFI’s action :-
- SGX to direct KB to appoint an Independent Financial Adviser (IFA) to advise Minorities on the reasonableness of the buyout offer.
- Bermuda Court of Appeal to reprimand Excel for its insolent behavior. Additionally, to charge Excel for “Abuse of Court Process” for appealing without justifiable reasons. Hence, Petitioner and other minorities should be awarded with higher relief.
- In view of current development and in the interest of Minorities, Bermuda Appeal Court to speedily review the appeal by Excel and to enforce a just “Class Remedy” relief.

I expect KB to initiate an aggressive share buyback commencing tomorrow (before the release of offer document).

In my view, hold on to your shares and do not rush to sell.

The queue to buy at 40.5 cents is worth about $12 million. Clearly, this is a major attempt to deny Kingboard Laminates any success with its lowball 40-cent offer which actually is an opportunistic move to try to buy on the cheap.

Monitor closely share buyback activities. This should tell a tale.