Privatisation of AmCorp

Yet another privatisation of a listed company was announced on Jan 17th 2006.

Sigh!

Disgusting lah.

Here was a clip from a newswire stating the issue.

The founder of Malaysia's AmcorpGroup Bhd. (2585.KU), Executive Chairman Azman Hashim, will buy all remaining shares in the investment-holding company he doesn't already own for MYR1.40 a share in cash, AmcorpGroup said Tuesday.

Price of Amcorp was at 1.04 when it was suspended trading to accomadate the announcement.

So at first glance, the offer does sound reasonable.

For the opportunist, well an opportunist is an opportunist. And this was a valid reason for them to jump into Amcorp and hope to make some moola from this corporate exercise. Nothing really wrong for them doing so. Honestly. I have no grudge against them.

For the minority shareholders, surely the first thingy that comes to their mind was how much and what's the premium over the current price and for the lesser few, are they getting a good price from this offer.

And for others.. well... some mumblers and bumblers... they simply hate this whole Privatisation Issues because it totally makes a mockery of the whole share market and more often than not, the minority shareholders are made an offer which never justifies their risk in investing in a public listed company and worse still the offer does not adequately compensated for their withdrawl of their investment.

First of all, is the offer really fair?

In the Edge newsclip the other day (17-01-2006: Amcorp to go private , the following statement caught me attention..

According to its company report, Amcorp holds a 32.9% stake in AMMB Holdings Bhd, 11.9% in AmInvestment Group Bhd, 43.4% in RCE Capital Bhd, 44.2% in AMDB Bhd, 62.6% in MCM Technologies Bhd and 8.1% in ECM Libra Bhd.

Now if we used the simplistic RNAV and yet errornous way of valuing via the traded share, then as on 17th January, Amcorp's value just by calcuating the value of shares it owns in its subsidiaries, then Amcorp's worth is around 1.82.

Now obviously the trade price sometimes does not reflect the true value of the share. And in Amcorp's case, the jewel(s) in the crown is obviously its stake in AMMB Holdings and AmInvestment Group. Now based simply on consensus valuation of AMMB and AmInvestment Group, the revised RNAV value of AmCorp goes up to some 2.20.

So what is the offer? 1.40?

Again i would like to stress that using RNAV valuation does not reflect the true worth of the company since most of the time, the traded market price does not reflect accurately the true value of the company. When the market is hot, the traded price is also hot. And when the market is slow, Uncle Woo and Auntie Ying are always flying around waiting to be whacked! (chinese say it as pak woo-ying lah)) See how inaccurate this RNAV is?

What do you think?

Another fair privatisation thingy onot?

Oh.. btw... as usual, included in this offer is the nice little threat that AmCorp will be delisted after this corporate exercise, if this privatisation goes thru successfully.

How?

If you are a minority shareholder..... do consider what you are being offered.

Btw how ironic it is beccause when a company lists their shares, their listing price is usually based on the most optimistic earnings forecast available. (the higher the estimate, the better mah) and when they want to delist... their GO price is usually based on the most pessimistic remarks and they can think of!

Share market mah.. see how they SHARE their worth with you?


And for example, today the Star Biz carried this article, Privatisation news lifts Amcorp stock and the following remark kinda stinks.

The research house also said it had been difficult for Amcorp, with a 32.9% stake in AMMB Holdings Bhd, to realise its full worth and the RM1.40 per share offer would allow investors to participate in unlocking its value.

Look at what they dare to say.

Difficult to realise Amcorp's full worth wor...

and so because it is difficult to realise the full worth, the rm1.40 per share offer would allow investors to participate in unlocking its value.

???

Goodness me!

What kind of tok is this?

Yes, the unlocking of Amcorp's value will occur... but...just for whom does it benefit?