Tuesday, September 25, 2012

SC Makes Stance On "Not Fair But Resonable" Advice

Thank you for listening SC!

Posted the other day: Independent adviser claims BRDB OFFER NOT FAIR BUT...

I ranted like mad because I thought the advice was rubbish. I wrote.

  • What kind of recommendation is that?

    The offer is deemed not fair but reasonable and because it is reasonable the minority shareholder should accept the offer???


    Look if it is not fair, it is not fair.

    Simple as that.

    Why use the share price versus the offer price as yardstick to determine if it is reasonable for the minority shareholder to accept the offer?

    The offer should always be gauged against the fair value of the company and NOT AGAINST THE STOCK PRICE!

    The independent advisor should have known this better!

    Look they admitted already that the offer is not fair.

    So why should the minority shareholder short change themselves by accepting any offer less than fair?

    Utter bullocks!
On today's Edge.
  • SC imposes new demands on advisors for takeover offers Written by Ho Wah Foon of theedgemalaysia.com 
    Tuesday, 25 September 2012 18:25

    KUALA LUMPUR (Sept 25): The Securities Commission Malaysia (SC) has issued an expanded Practice Note, imposing more requirements on independent advisors for take-over offers.

    In a statement Tueday, the capital market regulator said the enhancements -- to  take effect on Nov 1, 2012 -- will provide shareholders to a take-over offer with “clearer and more comprehensive advice to enable them to make informed decisions”.

    Under the expanded Practice, advisers are required to consider ‘fair and reasonable’ as two discrete terms in making a recommendation. For an offer to be ‘fair’, the offer price must be at least equal to or more than the value of the securities of the take-over offer.
    To decide whether an offer is ‘reasonable’, advisors have to evaluate the ability of the offeror to pass special resolutions, liquidity of the offeree securities and other qualitative considerations, the SC said.

    “The decoupling of the terms will further ensure that independent advice circulars are more easily understood, transparent and provide clear bases to justify a recommendation,” it said.

    The Practice Note also requires advisers to select the most appropriate valuation methodology for the securities and provides guidance on various types of valuation methodologies.

    Advisers are also needed to base their opinion on reasonable assumptions, to disclose all material assumptions and to ensure they have a reasonable basis to rely on information used in forming an opinion on the offer.

    The introduction of these new requirements appears to come in response to public criticism that the securities watchdog has failed to act on complaints by minority shareholders in some recent events.
    For example in the privatisation of Glenealy PLANTATION []s Bhd, the company’s major shareholder did not provide minority shareholders with an independent valuation of the company’s assets. It merely used an outdated valuation price, which disgruntled shareholders said were grossly undervalued.

Thursday, September 20, 2012

Minority shareholders should vote with all the facts

On Star Business: Minority shareholders should vote with all the facts

  • Thursday September 20, 2012
    Minority shareholders should vote with all the facts

    Raison D'etre - Risen Jayaseelan

    MINORITY shareholders should not hesitate to vote for their rights in corporate deals that involve their companies.

    They should even bandy together to strengthen their voting power in order to protect their rights. But they should also vote with all the facts in hand. Consider the case of Bandar Raya Developments Bhd (BRDB). The major shareholder is offering RM2.90 per share. That's a price that the stock has never traded at before so it does seem attractive.

    However, valuation wise, there are those who opine that the assets of the company are worth more. So, should minority shareholders hold out for more? Perhaps.

    But before doing so, they need to consider two things.

    One, that there has been no competing bid coming in, so far at least. Do note that for the major shareholder, Ambang Sehati Sdn Bhd, which owns 18.5% of BRDB, to buy out the rest of the shareholders, it is going to fork out a whopping RM1.17bil in cash.

    That's a lot of money. Is there really anyone else out there willing to pay so much for BRDB in cash? If you are convinced there is, and that such a party will make a counter offer, then hold onto that BRDB stock.

    You will be happy if that counter bid came through. But what if no one were to make a higher offer?

    And this leads us to the second thing minority shareholders should think about: that if this deal falls through and there's no other competing bidder coming into the picture, BRDB stock is very likely going to slide down to the levels it traded at before all this takeover hoopla came about. That's around under the RM2.40 per share mark.
    And that's gonna wipe off a good 50 sen per share of your holding.

    It is most likely not going to trade at the estimated revised net asset value price of RM3.81, a valuation given by the independent advisor.

    Sadly, most property-related stocks trade at discounts to their net asset values.

    Sure, one may think that if the major shareholder is willing to pay RM2.90 for the company, he knows something that we don't. And worse, what if he flips the company or its assets for a higher price soon after the privatisation?

    If Ambang Sehati does that, it would not a leave a good taste among minorities. (Recall that one other tycoon did something similar and suffered albeit a short-lived opprobrium for it?)

    But minority shareholders have no way of knowing what the owner's going to do if and when he privatises the company. All that you know is that there's a RM2.90 cash offer on the table. You could take it and run or you could seek to fight. But if you want to hang on and fight, know all the facts and risks.

    News editor Risen Jayaseelan is still puzzled that despite all the letters written and phone calls made by minority shareholders asking for a higher buyout price in the Glenealy Plantations (Malaya) Bhd, that these shareholders were only able to count for a mere 4.23% of votes.

Hmmm.... interesting.

Accept the offer juest because there might not be another better offer?


Ok, shall I call up my property agent and tell her that BSC is for sale and ask what kind of price that prime asset could fetch?

All I know is if the offer is not fair, why should I accept the offer price?

And in another interesting article: Shareholders should voice dissent more strongly
  •  Thursday September 20, 2012
    Shareholders should voice dissent more strongly

    Comment by Rita Benoy Bushon

    THE case of the recent privatisation of Glenealy Plantations (M) Bhd is highlighted for the broader interest of the capital market. Thus, I would like to recap this privatisation exercise.

    Samling Strategic Corp Sdn Bhd has proposed to privatise Hong Kong-listed unit Samling Global, in turn triggering a need to privatise Glenealy and its associate company Lingui Developments Bhd.

    Samling Global subsequently proposed a privatisation offer for the remaining shares in Glenealy at RM7.50 per share. A dividend of 52.75 sen was subsequently given a day before the court-convened meeting.

    We argued that when a company's value is inextricably linked to its land, not undertaking to revalue its most prized asset in making an offer to privatise is unacceptable. Especially so in this case where the valuations were based on book value of the assets in 1998, some 14 years ago.
    Though the law is silent on revaluations of assets in privatisation exercises, we urge the company directors to embrace best practices and undertake such exercises before the deal is tabled at the company meeting.

    In the absence of such voluntary revaluations, the regulators must then compel companies to undertake the revaluations. At the very least, doing so would have introduced an element of price discovery always an important element when a particular stock is as illiquid as Glenealy.

    What about the other gatekeepers? Current practice requires independent advisers to be hired (and be paid for) by the target companies. They are obliged to advise the disinterested shareholders on the offer in a transparent manner and to disclose to them the salient and material information so that an informed decision can be made.

    As such, on what basis did the independent adviser state it was fair when the current land value was not even known?

    The independent advisers in the same breath also stated that the palm oil industry remained “positive with strong demand and firm prices,” and that “between 2007 and 2011, Glenealy had been returning uninterrupted profits.” More so, that would mean there is intrinsic value in the company which is not reflected in the share price currently.

    In addition, Glenealy has previously been a thinly-traded stock and thus the market price does not mirror its true value. In this instance, a revaluation is even more important to make apparent the current value.

    Despite all this, minorities voted for the resolution.

    Glenealy's 54% owner Samling Group had proposed a resolution that needed 75% approval from the shareholders who are present and voting at the CCM. It also requires not more than 10% of the disinterested shareholders that vote against this resolution for the deal to go through.

    The offer was voted through by 331 shareholders in the privatisation bid, a number that represented 85.31% of the total number of shareholders present in person or by proxy at the meeting.

    Minority shareholders owning 4.23% of the shares opposed the deal but this was not sufficient as it did not reach the 10% required level.

    I can only rationalise this mom-and-pop retail investors trait who usually think that they are at the losing end, giving in to sweeteners and consequently choosing the path of least resistance when accepting the offer with reliance on independent advice.

    Lastly, we urge that minority shareholders stand up and voice their dissent more strongly at the meetings if they believe the offer is not in their best interest, especially the institutional investors who are more savvy and have the muscle to influence the outcome.
    The regulators too must look into similar deals to protect the interest of the minority shareholders.
    Rita Benoy Bushon is chief executive officer of Minority Shareholder Watchdog Group.

Wednesday, September 19, 2012

Independent adviser claims BRDB OFFER NOT FAIR BUT REASONABLE

On Star Business: Independent adviser recommends acceptance of Bandar Raya Developments buyout

  • Wednesday September 19, 2012
    Independent adviser recommends acceptance of Bandar Raya Developments buyout

    PETALING JAYA: The independent adviser for Bandar Raya Developments Bhd (BRDB) has recommended that minority shareholders accept the RM2.90 per share general offer by the company's major shareholder, deeming the offer as “not fair but reasonable”.

    Major shareholder and chairman, Datuk Mohamed Moiz Jabir Mohamed Ali Moiz, who owns 18.47% of BRDB via his private vehicle Ambang Sehati Sdn Bhd, had earlier made an offer to acquire all the shares and warrants of BRDB at RM2.90 and RM1.80 respectively. Moiz has been BRDB chairman since February 2002

    The independent adviser, namely AmInvestment Bank Bhd, said in a circular to shareholders that the offer price for the shares represented a 91 sen or 23.88% discount to the estimated revised net asset value of the shares. “In our view, this 23.88% discount renders the share offer price of RM2.90 to be not fair,” it said.

    However, it has recommended that shareholders accept the offer as the offer is considered not detrimental to them since the shares and warrants have consistently been trading below the offer price for the past three years up to July 30, when the offer was made.

    Furthermore, AmInvestment Bank said BRDB had not received any other offer for the company's shares or its assets and liabilities.

    It said the share offer price represented a premium ranging from 39 sen to 53 sen per share over the five-day, one-month, three-month and six-month volume weighted average market price up to July 30 while the warrant offer price represented a 36 sen to 52 sen premium over the same periods.

    It added that the share offer price's 39-sen premium based on the five-day volume weighted average market price “is within the range of successful precedent privatisation transactions in Malaysia of 2.46% to 37.50% since January 2011.”

    AmInvestment Bank also reminded holders of the warrants that these securities would expire on Sept 26, after which they would have no value.

    It said that based on the share offer price, the annual gross dividend yield for the shares for the past two years was about 2.59%.

    Ambang Sehati had proposed the acquisition of The Bangsar Shopping Centre, Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall early last September on a fair value basis. The properties had a total value of RM942.37mil.

    But the offer to buy the properties at RM914mil fell through several weeks later after questions arose over the price, motives behind the acquisition, the identity of the ultimate shareholders behind a 23.57% block of shares held under a nominee account for Credit Suisse and the company's prospects after losing properties generating recurring income.

    It was then decided that the properties would be sold via open tender by the first quarter of this year with Ambang Sehati participating but the tender for the properties was never carried out. This was followed by the general offer by Ambang Sehati to buy out the rest of the shares in BRDB for RM1.17bil cash.

    BRDB closed unchanged at RM2.85.
What kind of recommendation is that?

The offer is deemed not fair but reasonable and because it is reasonable the minority shareholder should accept the offer???


Look if it is not fair, it is not fair.

Simple as that.

Why use the share price versus the offer price as yardstick to determine if it is reasonable for the minority shareholder to accept the offer?

The offer should always be gauged against the fair value of the company and NOT AGAINST THE STOCK PRICE!

The independent advisor should have known this better!

Look they admitted already that the offer is not fair.

So why should the minority shareholder short change themselves by accepting any offer less than fair?

Utter bullocks!

Don't ask the investor to accept peanuts for their bar of gold!

Also on Star Business: BRDB buyout in sight.

The article is well written except for the first two lines!
  • Wednesday September 19, 2012
    BRDB buyout in sight

    Minority shareholders offered unprecedented cash price for their stock

    THE buyout of Bandar Raya Developments Bhd (BRDB) is one of the more publicised merger and acquisition exercises of the year for a variety of reasons. For one thing, it started off a year ago as a move by major shareholder Ambang Sehati Sdn Bhd to buy over BRDB's prized assets namely the Bangsar Shopping Centre (BSC), Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall for RM914mil.
    The deal quickly drew attention, as not only was it a related-party transaction but also because one of the properties targeted by Ambang Sehati was the iconic BSC, a neighbourhood mall which at one time was not doing very well. Following a multi-million ringgit makeover several years back, it became a magnet for the who's who, not only of the corporate world but also Kuala Lumpur's elite.

    Over the weeks that ensued, attention was drawn to the deal as some commentators reckoned that the properties might be worth more than the offer price.

    The Minority Shareholder Watchdog Group also drew attention to a 23.57% stake in the company, whose voting rights would have impacted the deal one way or another. The ultimate owner of that stake could not be determined despite queries made by BRDB and the regulators.

    There was also some grumbling over BRDB's prospects without those prized assets. To be sure though, it isn't clear if there were competing bids for the assets.

    Possibly due to the negative press that surfaced after that proposal, and faced with questions over whether BRDB was getting a fair deal for the assets, the company and Ambang Sehati decided to call off the deal. That move was seen by some as a credible move by BRDB in the best interest of shareholders.

    BRDB later said it would conduct an open tender for the assets but that did not materialise.
    News trickled in over the remainder of 2011 and well into this year of the company's interest and intention to dispose of the assets. At the end of July, Ambang Sehati made a conditional take-over offer to take BRDB private.

    With this offer, all the criticisms and questions of the earlier deal become academic. With this deal, minority shareholders were being offered a cash price for their stock in the company at a level never traded before.

    A major reason why Ambang Sehati and many other major shareholders who seek to privatise their listed assets for that matter was making the offer was because the shares and warrants were trading at deflated values.

    The shares and warrants of BRDB have been trading below the offer price (of RM2.90 and RM1.80 respectively) for the past three years up to July 30, when the offer was made.

    AmInvestment Bank Bhd, the independent adviser for the deal, which deemed the offer of RM2.90 per share and RM1.80 per warrant as “not fair but reasonable”, had also advised minority shareholders to accept the offer.

    Year-to-date, the share price has not moved by much, trading in the RM2.30 to RM2.40 range in the past few months before surging above that band following the offer.

    Besides this, AmInvestment pointed out that the company's shares also suffered from being “fairly illiquid”. It said that from September last year to this August, the average monthly trading volume of 4.42 million shares represented 1.09% of the free float of 406.74 million shares.

    Should the offer be accepted by shareholders, management would have the breathing space needed to review the operations of the company and make plans for growth.

    Ambang Sehati has said it would review the operations of BRDB, which might include expansion, disposal and/or redeployment of assets and/or organisational changes.

    It added that while BRDB would continue to focus on residential projects as well as pockets of commercial development, particularly in the Klang Valley and Johor, there were also plans to expand on the company's presence abroad, especially in the United Kingdom and the Middle East.

    Furthermore, the asset sale which was aborted last year may come through as Ambang Sehati noted that as part of plans to concentrate on property development, BRDB might divest its investment in certain assets at an opportune time.
What does Star Business mean by BRDB buyout in sight? Has the minority shareholders agree anything on this lopsided deal?

What does Star Business mean by saying 'Minority shareholders offered unprecedented cash price for their stock'.  What's the meaning of unprecedented cash? All the minority shareholder received is an offer which is not fair at all.

For BRDB minority shareholders. Think about it. First thing about this statement.
  • A major reason why Ambang Sehati and many other major shareholders who seek to privatise their listed assets for that matter was making the offer was because the shares and warrants were trading at deflated values
The shares and warrants were trading at EXTREMELY deflated values.

Now think about the initial attempt to buyout BRDB's prime assets in the scandalous related party transaction.

There's MASSIVE value in those properties.

That's why the initial attempt to buy those properties.

Have you been to BSC lately?

That place is hot! So hot!

Prime Bangsar land too!

How about Capsquare? That sits right near prime Jalan Ampang land.

How about Menare BRDB?

And how about the bustling Permas Jusco Mall?

These are all hot properties!

And they were supposed to do an open tender for these properties. Why didn't they? Were they afraid that the true value of these prime assets will be discovered via an open tender?

Think about it.

Here's another article: http://biz.thestar.com.my/news/story.asp?file=/2011/9/7/business/9437508

I do pray and hope that the minority shareholders know and understand the true value of these prime assets. Don't be fooled by the offer price. Understand that this offer is grossly unfair and please fight for what yours by rejecting this offer.

Friday, September 14, 2012

MSWG Wants SC To Mandate Property Revaluation Prior To Privatisations

Just posted this morning: Glenealy: Sad Day For Investing

  • Ok, one of the questions raised was Glenealy did not carry a property valuation of their plantations during this privatisation.

    If that was true, then this privatistion offer was simply absurd.

    How could SC allow an offer to be made without any proper valuation?

On the Edge:
  • Watchdog wants authorities to mandate property revaluation prior to privatisations Written by Cindy Yeap of theedgemalaysia.com 
    Friday, 14 September 2012 18:27

    KUALA LUMPUR (Sept 14): Authorities should make it compulsory for public listed companies to revalue their assets prior to any privatisation exercise so that minority shareholders can better evaluate buyout offers, a shareholder watchdog group said Friday.

    "We reiterate our call to authorities to mandate the revaluation of PROPERTIES [] prior to any privatisation exercise," Rita Benoy Bushon, the CEO of the Minority Shareholder Watchdog Group (MSWG) wrote in a weekly newsletter dated Friday.

    Her comment was in reference to the privatisation of Glenealy PLANTATION []s Bhd, which was passed by shareholders at a court-convened meeting earlier this week, where Bushon said some queries by minorities weren't sufficiently addressed.

    "The most apparent was on the issue of the group's landed properties, comprising mainly plantation land which have not been re-valued since 1998," she wrote in the newsletter.

    On Wednesday, Bushon told The Edge Financial Daily that an updated valuation report on assets like plantations land would make it easier for minority shareholders to make educated decisions with regards to takeover offers. The valuation reports should be within a six month period prior to the privatisation exercise to ensure validity of the numbers, she added in an emailed reply.

    "Though the law is silent on the revaluation of land in cases of privatisation, we urge companies to embrace transparency by undertaking such revaluations especially when most assets are land-based," Bushon said.

    In Friday's newsletter, Bushon also asked that independent advisors "play their role in advising minority shareholders with greater sense of responsibility". When advising minority shareholders, Bushon said advisors should, for instance, "be transparent" about material parameters such as how the absence of an up-to-date asset revaluation exercise could impede decision-making.
I am shock to read that SC doesn't have such a mandate.

How can?

Without such a mandate, minority shareholders are going to be screwed if another company follows what Glenealy did to its shareholders.

    Glenealy Shareholder: "It is the rape of the century on the minority shareholders"

    Posted on the Edge:

    • Disgruntled shareholders fail to scuttle Glenealy privatisation Written by Chong Jin Hun of theedgemalaysia.com 
      Friday, 14 September 2012 17:00

      KUALA LUMPUR: Standing in front of the board of Glenealy Plantations (M) Bhd at the court convened meeting (CCM), minority shareholder Cho Kwai Lin told other shareholders who were present to cast their vote that the company’s privatisation exercise was “the sale of the century in Malaysia”.

      “If I may be allowed to say so, it is the rape of the century on the minority shareholders,” Cho said in her speech which was read at the CCM and made available to reporters.

      Cho told other minority shareholders that the offer price of RM7.50 per share essentially values Glenealy’s plantation sites at a book value of RM25,000 per hectare.

      “This is a discount to the estimated RM36,000 per hectare which Glenealy paid for a tract in Indonesia”, she said, referring to figures from analysts’ reports.

      At RM36,000 per hectare, Cho argues that Glenealy shareholders should be entitled to at least RM10.26 a share under the privatisation. She said should major shareholders insist on taking over Glenealy, the offer price “should be not less than RM10 a share and that the company’s entire cash pile should be entirely distributed to shareholders”.

      “For all the above reasons, I stand here to call on all minority shareholders present today to join me in voting against the resolution in its present form,” she told those at the CCM.

      Nonetheless, the controlling shareholder, Samling Strategic Corp that held 53.68% equity interest in Glenealy, garnered enough votes to take over the company at RM7.50 per share.

      Analysts noted that Glenealy’s board declared a special dividend of 52.75 sen per share two days before the CCM. This might have to some extent have helped convince some minority shareholders to accept the offer as the dividend narrowed the value gap. The CCM lasted for about four hours at the Prince Hotel.

      Some disgruntled shareholders were voicing their dissatisfaction to the media. Shareholder Lim Thian had asked why wasn’t there a valuation report for the plantation land owned by Glenealy.

      He said having a valuation report is crucial to ensure shareholders get a fair price for the privatisation of the firm. He said the estimated RM25,000 per hectare for the company’s tracts significantly undervalues the company based on previous transactions involving other plantation firms.

      “If there was a valuation report on the deal, shareholders will most likely not approve the proposal. “This is material information but Bursa Malaysia and Securities Commission have not said anything so far,” Lim told reporters.

      Minority shareholder Leong Lau Chew, 71, was outside the hotel ballroom, where other shareholders had deliberated and the voted on the proposed privatisation yesterday.

      Leong, a seasoned investor, said he did not want to attend the meeting as he was unhappy that the unfair privatisation offer price would deny the minorities’ opportunities to ride on the company’s future growth. “I don’t want to go into the meeting … I’m afraid I will probably shout [at the board].

      If the company is not good, why would the major shareholders want to privatise it?” Leong told The Edge Financial Daily while the CCM was in progress. He said Glenealy should remain listed as investors like him had enjoyed dividends from the company all these years.

      When it is taken private, minority shareholders would not be able to reap the gains from Glenealy’s future expansion plans. Leong is one of the many disgruntled minority shareholders of Glenealy who had opposed the privatisation exercise as they viewed the offer price of RM7.50 per share undervalued the plantation company.

      The value of its parcels of plantation land has not been appraised since 1998. The offer price values Glenealy at RM865.2 million, which works out to about RM16,067 per hectare.

      Independent adviser Hwang-DBS Investment said in a circular to shareholders that Glenealy’s implied enterprise value/planted area of RM23,628 per hectare is below the average of RM39,261 per hectare among comparable companies but still within the range of RM18,380 and RM54,940 per hectare.

      As the meeting was ongoing, some shareholders walked out without voting on the proposal as some felt that the RM7.50 per share offer price does not reflect the true potential of the company.

      Some contended that whether they cast their votes or not, the company would still be taken private by major shareholders. The shareholding in Glenealy was fragmented.

      The pass on the resolution on the privatisation exercise once again indicates that a concerted effort by all the minority shareholders is still a rare occurrence in Malaysia corporate scene.

      This article is appeared in The Edge Financial Daily on 14 September, 2012.

    Glenealy: Sad Day For Investing

    They won.

    And the minority shareholders who fought gallantly lost.

    • 85% of Glenealy shareholders say aye to buyout bid Posted on 13 September 2012 - 08:36pm

      Eva Yeong

      KUALA LUMPUR (Sept 13, 2012): Glenealy Plantations (M) Bhd today saw 85.31% of its shareholders approve a RM396.32 million buyout offer by parent Samling Global Ltd (SGL), despite allegations of unfairness by a small group of disgruntled shareholders.

      Under the proposed exercise, SGL, which owns a direct and indirect 53.8% stake in Glenealy, is offering investors RM7.50 per share to take Glenealy private, a 6% discount to today's closing price of RM7.95.

      In a filing with Bursa Malaysia, Glenealy said 331 shareholders voted for the privatisation bid, representing 85.31% of the total number of shareholders present in person or by proxy at the court-convened EGM.

      "The total nominal value of the Glenealy scheme shares held by the scheme shareholders who voted for the resolution was RM36.1 million, representing 94.17% of the total nominal value of the scheme shares held by the scheme shareholders who voted," it added.

      Thus, only 4.23% of the total nominal value of votes were against the resolution.

      "All the three conditions were met, that is, more than half of those present in person or by proxy voted in favour (of the proposed deal), and secondly the nominal value was more than 75% of those present. The third condition is that less than 10% of the total scheme shareholders voted against the resolution," Glenealy independent non-executive director Md Yusof Hussin told reporters after the four-hour meeting.

      He expects the privatisation exercise to be completed in November, with cash payments to be made to shareholders in mid-November.

      Earlier, a group of disgruntled minority shareholders said the offer price of RM7.50 was too low, adding that an independent adviser should have been appointed to advise shareholders on Glenealy's plantation land valuations.

      "Basically, there was no valuation done. The market average that they gave us was RM39,000 per ha but they offered us RM23,000 per ha for the planted land. They have not accounted for the unplanted land but they have acknowledged the RM39,000 per ha market average valuation," said a shareholder who only wanted to be known as Low.

      He said the group had brought up the issue to the Securities Commission (SC) and Bursa Malaysia, but did not receive any response from either party.

      Low said the Minority Shareholders Watchdog Group had also raised some questions during the EGM but these questions were not addressed properly.

      He claimed that the SC is not protecting the minority shareholders and there is no corporate governance, which would also affect foreign investments.

      "There were various questions (from shareholders) but it's a question of valuation. Basically, we got an offer and we have to table it to the shareholders. It is really their decision. The valuation is an art, not a science and there's a problem when you take an average valuation because in plantation, you have various types of land," said Yusof.

      "You can't just say per planted hectare. Planted hectare could be newly planted, could be newly matured, could be prime maturity and could be due for replanting. These are all attached to values. Obviously on one side of the scale, where it's just newly planted, it's basically on the land value with little bit of planting," he added.

      He said the age profile of the trees varies from company to company but the investment advisers have already indicated that the valuation is within the acceptable range, which the board members have taken into consideration.

      Glenealy has some 10,000ha of oil palm plantation in Sabah and 20,000ha in Sarawak. Yusof said the land in Sarawak have leases up to 2051 with very young plants, while the land in Sabah are all matured, with some due for replanting.

      Upon completion of the privatisation, Glenealy will make an application to Bursa Securities to delist the company and it will become an indirect unit of Samling Strategy Corp Sdn Bhd.
    Here's something I had mentioned before.

    Remember in investing, prevention is always better than cure.

    The issue of trust is so important in investing. Remember when you invest, you are buying a stake of the company and when you buy a stake of the company, you should think yourself as a partner of the business (Sadly, in the corporate world, the term business partners doesn't seem to exist and minority shareholders are merely treated as OPM (other people money) and since they are the OPM, they are there to be taken advantage of. Yes, the OPM is there to be screwed!) .

    Now if the stake purchase represented a private company and not a listed stock, what would you have done?

    Would you take extreme precaution and address the issue of TRUST?

    Yes, my dear.

    Let's say you were going to invest or invited to invest in a saloon business with this gal friend, Mandy, what would you do?

    Two things, one is you are going to ask about the profitability of this business venture and the other issue you will address whether you TRUST Mandy. Will Mandy screw you over the moment you have your eyes turned away from this saloon business.


    Now the amazing thing is a lot of retail investors don't ask this TRUST question.

    All they care is whether the stock can make money and whether the stock can go up.

    How ironic isn't it?

    Look at all the recent issues involving privatisation.

    Could they have been avoided if the investors prevented themselves from being a minority shareholder of these companies?

    Yes, treat corporate integrity and transparency seriously!

    If you cannot trust the company, don't invest in it.

    Don't be a minority shareholder of such a company!

    Don't be an OPM waiting to be screwed!

    Ok, one of the questions raised was Glenealy did not carry a property valuation of their plantations during this privatisation.

    If that was true, then this privatistion offer was simply absurd.

    How could SC allow an offer to be made without any proper valuation?

    From Star article: http://biz.thestar.com.my/news/story.asp?file=/2012/9/13/business/12017394&sec=business

    One line stood out.
    • Minority shareholders led by Patrick Low were displeased with the offer price, pointing out that it was too cheap a valuation considering that Glenealy’s land had not been re-valued since 1998.
    Mr. Patrick Low has made a very solid point.

    But on the other hand, I am left wondering, why be an investor in such a company?

    Why invest and be a BUSINESS PARTNER of a business whose owners had not bothered to make a land revaluation since 1998????

    What does this say of such business ownership and management?

    Hasn't the integrity issue stood out like sore thumb?

    Ah... but this where some local retail investors tend to be overly smart. For some, they think because the revaluation exercise is not done, there is value to seek, profits to be made.

    So they invest or perhaps I should say speculate.

    Look at the end result today.

    Investors tried their very best to cure the malaise. They argued. They highlighted the gross unfairness, the injustice.. They protested. They tried to stop the privatisation.

    In the end they got peanuts for their pot of gold.

    So this is a harsh reminder.

    AVOID companies with integrity issues.
    DON'T invest in companies where you don't trust the owners/management.

    PREVENTION by avoiding is much better CURING via protesting.

    Wednesday, September 12, 2012

    Let's Cheer For Glenealy's Minority Shareholders!

    Yes, let's cheer and give our full support to Glenealy's minroty shareholders!

    We hear you!
    We feel you!
    We support you!


    On the Edge:

    • Glenealy minorities to protest despite special dividend Written by Ho Wah Foon of theedgemalaysia.com 
      Wednesday, 12 September 2012 10:22

      KUALA LUMPUR (Sept 12) – Disgruntled minority shareholders of Glenealy PLANTATION [] (M) Bhd will go ahead to protest against the privatisation price of the company at its EGM tomorrow (Thursday) despite a high special dividend declared yesterday.

      To appease shareholders, the company yesterday declared a special dividend of 52.75 sen per share for the year ended 30 June 2012 totalling RM60.18 million. This move sent the stock up by 40 sen or 5.5% to RM7.70 in early trade today.

      This special dividend is in addition to the interim dividend of 5.0 sen per share less tax and the single tier tax exempt interim dividend of 3.5 sen per share declared on 30 August 2012, the company added.

      But a group of unhappy minority shareholders headed by Patrick Low told theedgemalaysia.com today they will still go ahead to protest against the privatisation price of RM7.50 fixed by the company.

      “We are still not happy. From day one it is about principle and not about Glenealy alone. Proper valuations have to be done. We are sick of listed companies as they are ripping minorities. We will still protest for the good of our nation’s future,” said Low.

      Glenealy’s non-interested shareholders are slated to meet on Thursday (Sept 13) to vote on the proposed privatisation of Glenealy by major shareholder Samling Strategic Corp Sdn Bhd at RM7.50 per share.

      The privatisation could not be carried out if the number of votes cast against the proposed privatisation at the meeting is more than 10% of the votes of non-interested shareholders present.

      Earlier this month, Low sent a letter to the company and securities regulators suggesting the privatisation price to be revised upwards to RM10.00, saying recent sales of other plantation lands and an OSK Research report lent support to their proposition.

      OSK Research had in a September 4 note described the privatisation offer as “cheap”.

      The letter was also copied to the CEO of the Minority Shareholder Watchdog Group (MSWG), Rita Benoy Bushon, who in response urged regulators to “compel a new valuation method” so that minority shareholders get fairer valuations in privatisation offers, especially in companies involving “fairly large PROPERTIES [] and fixed assets”.

      In the letter, which was also sent to the press on Sept 3, Low and his fellow shareholders described the offer price as “unreasonable” and asked for a fairer price.

      “Everyone knows the real value of the land so please give us some respect… hope to hear an improved and fair offer,” the letter read.

    Tuesday, September 11, 2012

    Ambang Sehati Threatens Bandar Raya Minority Shareholders

    Posted on the Star Biz: http://biz.thestar.com.my/news/story.asp?file=/2012/9/11/business/12001484&sec=business

    • Tuesday September 11, 2012
      Ambang may delist BRDB if can’t meet rule

      PETALING JAYA: Ambang Sehati Sdn Bhd plans to delist Bandar Raya Developments Bhd (BRDB) if its takeover of the company would result in the latter not being able to comply with the public spread requirement of Malaysia’s stock exchange regulator.
      The company had earlier made an offer of RM2.90 each to acquire all the BRDB shares it did not already own and RM1.80 each for all outstanding warrants in BRDB.

      Ambang Sehati, the private investment vehicle of BRDB chairman Datuk Mohamed Moiz Jabir Mohamed Ali Moiz, currently holds an 18.49% stake in BRDB. The offeror also holds 41.43 million warrants, or 19.12%, of the total outstanding warrants.

      One of the listing requirements of Bursa Malaysia Securities Bhd is that a listed issuer must ensure at least 25% of its total listed shares are in the hands of public shareholders to ensure its continued listing on the Main Market.

      Bursa Securities may accept a percentage lower than 25% of the total number of listed shares (excluding treasury shares) if it is satisfied that such lower percentage is sufficient for a liquid market in such shares.

      Ambang Sehati said if completion of its takeover of BRDB resulted in violation of the public spread requirement, it would withdraw the listing status of the latter from the official list of Bursa Securities.
      In its takeover offer documents, the offeror said it was desirous to increase its equity ownership in BRDB and where possible, take the company private and obtain full ownership in the company, as it viewed the latter as a long-term investment opportunity.

      “Ambang Sehati envisages that the BRDB group would increase its efforts to grow and cement itself as a premier property development company,” it said in a statement.

      Ambang Sehati said it expected the BRDB group to continue focusing on residential projects and pockets of commercial development in the country, particularly in the Klang Valley and Johor.

      In addition, the BRDB group is expected to build its presence overseas, especially in the Middle East and United Kingdom.

      Ambang Sehati’s offer will close at 5pm on Oct 1, being the first closing date. Its warrants offer will close earlier at 5pm on Sept 26
    That was unpleasant reading.

    As mentioned before, last year, the major shareholder, Ambang Sehati tried to buy four of Bandar Raya's prime assets. (You can refer to postings Bandar Raya Asset Sale: Yet Another Ludicrous RPT Transaction and And Ambang Sehati Is Rewarded With 73.6 Million From Their Purchase Of BRDB's Prime Assets )  Some had argued that the purchase price was grossly cheap and some pointed out the gross transparent issues that had happened when Ambang Sehati initially tried to purchase those four prime assets.

    When Bandar Raya announced that the Chairman had offered to buy assets from the compan in yet another LUDICROUS RPT Transaction, all that was announced that the board was just given two weeks to reply to the offer.

    Just two weeks was given.

    And the offer price wasn't even disclosed.

    Yes, they, Ambang Sehati, didn't even have the decency to disclose the offer price to the investing public.

    And more worringly, blogger

    Thursday, September 06, 2012

    Featured Article: Ingens takeover joke could recur if authorities sit idle

    On the Edge: http://www.theedgemalaysia.com/business-news/219928-ingens-takeover-joke-could-recur-if-authorities-sit-idle.html

    • Ingens takeover joke could recur if authorities sit idle Written by Ho Wah Foon of the edgemalaysia.com 
      Thursday, 06 September 2012 16:19

      KUALA LUMPUR (Sept 6): Sean Ng of Ninetology Marketing Sdn Bhd and Victor Chin Boon Long of INGENUITY SOLUTIONS BHD [] (Ingens) have cracked a huge joke on the stock market — but this joke is particularly cruel on unsuspecting investors who got burnt in the two-week saga.

      Shares of Ingens, which was only 12 sen per share at the beginning of last month, soared to over 46 sen on Aug 23, and then it fell to 23 sen when the irresistibly-high offer at 55 sen a share was publicly rejected by Chin on Wednesday.

      This means that investors who had bought the shares as it was rising on announced news of a takeover, or on hope of getting 55 sen a share, or even higher if there was a mandatory general offer (MGO), would be left high and dry and crying now.

      Of course, those who had dumped Ingens shares after the "too-good-to-believe" offer by Ninetology was announced on Aug 30 would be laughing all the way to the bank. And who would these people be? It must have included the "insiders" and "smart outsiders".

      Indeed, from the beginning, many had already cast doubt on the takeover bid — but since the show was allowed to go on under the bright day light without interference and it had generated a lot of market interest, the media had to cover and report the stories, regardless of whether they have faith in the offerors and offerees.

      For Ninetology, if they had been serious about taking over Ingens — which has seen five years of losses — they could have mopped up Ingens shares from the market. After all, they were prepared to pay 55 sen — way above the 30 sen-40 sen prevailing then.

      They should also have acted quickly instead of taking several days to announce the offer price. This was all too unusual. Theoretically, it's allowing punters to buy up the market and making it more expensive for Ninetology to take over Ingens. Ng's action defied logic.

      And to reject the offer, why did Ingens's Chin need to consider so long? In his own words, he was not even approached by Ninetology's Ng, although both have known each other for two years. Shouldn't he reject the offer fast so that investors would stop harbouring the expectation of an MGO that could send Ingens's price over 55 sen?

      I spoke to a head of research Wednesday morning, and he said it's a bit unusual for Chin to reject such a fantastic offer.

      Chin could have walked away with RM90 million — or a profit of RM70 million, since his average cost of buying his 29.15% stake was only 11 sen-12 sen per share.
      Some senior dealers are telling me they don't understand why the authorities are not taking action to curb such unhealthy practices and incidents that could dent the image of the capital market.

      If company owners who create misleading perceptions in the market are not hauled up by the authorities, history will repeat itself and investors may turn their back on Malaysia.

      Recently, the government set up a special task force headed by the Second Finance Minister to "improve the capital market". I wonder whether this means anything to anybody?

      Ho Wah Foon is the online editor for The Edge.
    What a big joke isn't it?

    How about Astro again?

    Delisted at a price of 8.3 Billion, seeks relisting minus two huge assets at 18,7 Billion?

    What mockery!

    How Not To Fake A Car Accident!!

    On youtube.

    Featured Article: Man Who THREW Away 90 Million

    On Star Biz: http://biz.thestar.com.my/news/story.asp?file=/2012/9/6/business/11976110&sec=business

    • Thursday September 6, 2012
      The man who threw away RM90mil

      Raison D'etre - Risen Jayaseelan

      CHIN Boon Long, Ingenuity Solutions Bhd's (Ingens) controlling shareholder, will surely go down in the annals of Malaysian corporate history. His declaration yesterday that he is not going to accept a buyout offer for his shares at 55 sen each should give him the moniker of the RM90mil man. Or more aptly, the could-have-been RM90mil man.

      That's because Chin is saying no to that almost unbelievable offer that values the whole of Ingens at a whopping RM300mil. (Chin owns about 30% of Ingens, so the 55 sen offer would have pocketed him RM90mil.)

      Valuing Ingens at RM300mil is mind boggling because just a few months ago, this was a stock with a market value of a mere RM50mil. This is a stock that traded below 10 sen for a whole year from last July.

      The stock's spectacular rise since early August is still an inexplicable development.

      So why is Chin turning down the opportunity to be a millionaire, 90 times over? He says that he prefers to go ahead with his grand plan of integrating Ingens with another ACE Market company that he controls, 1 Utopia Bhd.

      The plans involve the usual tech-talk stuff, like B2C and B2B, electronic payment gateways, loyalty programmes and the retailing of IT and computer products.

      In other words, what Chin is saying is that, his savvy business plan should eventually lift the value of both these companies to be worth so much more, that his equity in these companies will be worth more than the RM90mil he is being offered.

      It must be some plan though because typically, those type of businesses tend to earn low margins and have low entry barriers.

      Consider the numbers in this saga though the RM90mil Chin is turning down is:

      worth more than the entire market capitalisation of 1 Utopia of RM60mil

      worth many times more than the value of Chan's 12.85% equity in 1 Utopia of a mere RM7.6mil

      worth more than Chan's 30% equity in Ingens that works out to RM37mil

      values Ingens at six times more than what the company was trading at just a few months ago

      may be enough for Chin to actually buy 100% of another company in the same business.

      Considering all this, one wonders if there's more in this saga that meets the eye.

      The other concern of this Ingens saga is whether it is setting a bad precedent. What if there are copycats of this whole episode other listed companies may see the emergence of some hitherto little-know party making a buyout offer, but one that is directly only to the stakes owned by certain major shareholders. In the ensuing excitement that follows, especially on the hope that the offer is accepted which would then trigger a mandatory buyout of the rest of the shareholders, punters may jump in. And then get burnt like they did with Ingens.

      Business news editor Risen Jayaseelan reckons that if the buyout offer by Ninetology Marketing Sdn Bhd had actually led to the general offer for the rest of the shares of Ingens, it would have been one of the most generous offers ever of a Bursa-listed company, going by historic share price performance

    Monday, September 03, 2012

    Glenealy Minorities Fights For Their Rights Against Unfair Privatisation Price

    On the Edge: http://www.theedgemalaysia.com/business-news/219565-glenealy-halts-trading-faces-grouses-on-privatisation-price.html

    • Glenealy halts trading, faces grouses on privatisation price Written by Ho Wah Foon of theedgemalaysia.com 
      Monday, 03 September 2012 11:14

      KUALA LUMPUR (Sept 3) – A group of “disappointed and unhappy” minority shareholders, headed by one Patrick Low, said they will vote against the RM7.50 per share offer price for the privatisation of Glenealy PLANTATION []s Bhd.

      In a letter sent to Md Yusof Bin Hussin, independent director of Glenealy Plantations, they stated the offer price of RM7.50 per share by major owner Samling Strategic Corporation Sdn Bhd as “unreasonable” and said they wanted a fairer price, citing OSK Research has put a fair price at RM10.00.

      In early trade, Glenealy called for a trading halt without stating any reason. The last traded price was RM7.25 per share.

      In the letter to Md Yusof, which was also extended to the Securities Commission of Malaysia and Minority Shareholders Watchdog, the group said: “We merely hope that you all will treat us with fairness based on today’s market value of plantation land and unplanted land. Nothing more and nothing less.
      “We will definitely vote against this resolution if you continue to mislead us with unfair valuations which are clearly lopsided in favour of the owners. Everybody knows the real value of the land so please give us some respect and don’t treat us as ignorant investors.

      We expect you all to have conscience and practise good corporate governance and hope to hear for an improved and fair offer.”

      The group argued that the offer price of RM7.50 is based on the valuation of RM25,000 per planted hectare of land, which they contended “is totally not realistic with today’s market” as recently transacted prices were close to RM 70,000.00.
      They added that in a recent note, OSK Research had reported that the recent transacted price of Glenealy’s Indonesian Plantation was RM36,661 per hectare and based on this alone the share should be valued at more than RM10.00.

    Saturday, September 01, 2012

    MSWG Also Not Happy With Astro Listing!

    On Star Biz: http://biz.thestar.com.my/news/story.asp?file=/2012/9/1/business/11950273&sec=business

    MSWG is echoing the same points made in the blog posting: Want To Go For Astro IPO?

    • Saturday September 1, 2012
      MSWG unhappy about structure of Astro’s upcoming listing

      By JOHN LOH

      PETALING JAYA: The Minority Shareholder Watchdog Group (MSWG) is unhappy about a number of issues related to how the upcoming listing of Astro Malaysia Holdings Bhd is structured.

      “Our grouses still remain with regards to the listing and delisting exercises currently being done by many Malaysian conglomerates,” chief executive officer Rita Benoy Bushon said in the Aug 30 edition of MSWG's newsletter.

      She said Astro, if it was floated at RM3.60 per share, would be valued at RM18.7bil, far exceeding the RM8.3bil price at which it was privatised in 2010.
      “Here, Astro is listing without its foreign operations in India and Indonesia. We understand that Sun Direct TV business in India has about seven million subscribers as at last year despite only starting in 2008.
      “What's more, around two-thirds of the initial public offering (IPO) comprises offer-for-sale shares, which means the proceeds will go to the major owner, not the company,” she added.

      The pay-TV operator, which has a subscriber base of some three million users and a market penetration of 50% of Malaysian households, is offering up to 1.52 billion shares, or 29.2%, of its enlarged share capital at its IPO expected next month.

      Based on the indicative price of RM3.60 per share for bumiputra investors as reported by Reuters, the listing could raise up to RM5.47bil, making it the third largest in the country this year behind Felda Global Ventures Holdings Bhd and IHH Healthcare Bhd's RM9.93bil and RM6.3bil IPOs respectively.

      Only 474.3 million, or 31.2%, of the shares to be sold are new, giving Astro's existing shareholders the bulk of the gross proceeds at 70%.

      The offer-for-sale shares are to be sold by Astro founder Ananda Krishnan and Khazanah Nasional Bhd, although they will still command a 70.8% interest in the company post-IPO.

      Ananda, Malaysia's second-richest man, will retain a 50% stake in Astro and Khazanah 21%.

      Bushon explained that another sticking point about the listing is the portion allocated for retail investors, which was just the minimum 2%.

      “We hope the advisers and the company would consider allowing the clawback provisions from other portions, including cornerstone investors, if there is an oversubscription of the retail portion, say by more than five times.

      “And will the regulator step in to manage the way companies are listed and delisted in Malaysia?” she asked.

      A total of 1.26 billion shares, or 24.2%, of Astro would be offered to local and foreign institutional investors, including bumiputra investors, and just 260 million, or 5%, to retail investors.

      Of this, some 103.95 million shares, or 2% of the firm's enlarged share base, has been allocated for the general public, with half of that for retail bumiputra investors.

      The remaining retail shares would be offered to Astro employees, customers, directors and contractors.

      Astro had said in its prospectus exposure that 58% of the IPO proceeds would be used for capital expenditure and 29.3% to repay bank borrowings. The balance would be kept for working capital purposes and to defray listing expenses.