Monday, September 21, 2009

What's Up Kumpulan Jetson?

Good article on Saturday Star Biz: Takeover bids jack up share prices

It features the takeover bid by SM Nasarudin SM Nasimuddin and SM Faliq SM Nasimuddin of the Naza Group of the rather very smallish construction company Kumpulan Jetson Bhd.

Yeah, smallish.

Kumpluan Jetson has a share base of 53 million shares only, discounting the loan stocks and warrants. (Jetson has some 6 million loan stocks and 17 million warrants)

As mentioned by the author of the article, Anita Gabriel, "“It’s a small deal, Who cares!” scoffs a banker in a cavalier manner. "

Yeah, who cares yet again.

That's it yes?

Who cares if the minority shareholders are screwed.

Anyway, here's the deal described by Anita Gabriel.

  • Galvanising the takeover scene further, on Aug 20, Kumpulan Jetson announced that it received a takeover notice from Superior Pavillion Sdn Bhd, a company controlled by SM Nasarudin SM Nasimuddin and SM Faliq SM Nasimuddin of the Naza Group and Odyssey Wealth Sdn Bhd (which is 50% owned by the Nasimuddin brothers). The bid follows the acquisition of a 33.15% stake in Kumpulan Jetson on Aug 19 at 70 sen per share which triggered a conditional takeover offer for the rest of the shares, loans stocks and warrants in the company not already owned by them. The block was acquired from the company’s co-founders – Isnin Rahim (chairman and executive director) and brothers Datuk Teh Kian Ann (group managing director) and Tee Keng Kok (executive director), among others.

    Barely two weeks later, on Sept 7, the offer price was raised to RM1 per share (still below its net asset per share as at June 30, 2009 of RM1.54). Of course, minority shareholders (and profit seekers) cheered the move but what’s puzzling is why? The offerers had not made any further purchases since then and no explanation was given on the price revision. This begs the question – what could have changed in a short span of 12 trading days? This – its share price had skyrocketed by 48.5 sen or a whopping 66% in a single day following the takeover announcement. As of Friday, a month following the revelation of the takeover bid at RM70 sen per share and two weeks after the offer price was revised upwards to RM1, the share price stood at a high of RM1.96, taking little heed to Bursa’s warning to investors to trade with caution. Really, how high can it still go?

Yeah, all it takes is a takeover offer and the share rockets to the moon!

Anita raises more questions.

  • Here’s the thing – if the purchase price of the 33.15% block was seemingly undervalued, then why were the shareholders willing to let go at such a price to the detriment of the minority shareholders?

Yeah, why?

  • Adding to the bewilderment of market observers is that in recent days, Kumpulan Jetson’s director and co-founder Tee, who had earlier sold his stake to the offerers, has also been buying shares in the company. In filings with Bursa Malaysia, it was disclosed that Tee had bought 400,000 shares at between RM1.42 and RM1.43 on Sept 11.

    If Tee sold his stake at 70 sen a month ago and is now buying at just over RM1.40 per share, what is it that could have led to a change of mind? As a substantial shareholder (then) and director of Kumpulan Jetson, did he act in the interest of minority shareholders?

Now that's the obvious stinker!!!!

Sold at 70 sen but bought back some 400,00 shares between 1.41 and 1.43!

And Kumpulan Jetson last traded at 1.96.

How nice!

And of course, many would point out that this is such a smallish stock. It's way too easy to push up the shares!

And of course, many would also say.... 'Who cares!'

And here is the flight of Jetson the stock!


solomon said...

Moolah, count how many days the Regulator react before the UMA query. To me, I maybe wrong here, it is sending a signal that the market maker is warming up the market.

Hey, I could not believe with the 400,000 shares purchase by the owner's son. Rediculous.... Moolah tell me if this is not deemed as insider trading. Again, who cares? If You got extra money can join in the game ya...If the takeover bid stop by sudden, then all the greedy lots will get burn...this scene could be not far away??