Who Is Public Investment Bank Trying To Kid By Saying Offer For Hume Industries Is Fair?

On Business Times: ‘Hume takeover price fair’

• THE improved takeover offer price for Hume Industries (M) Bhd of RM4.50 from RM4.30 earlier is fair, says independent adviser Public Investment Bank.
  
  The bank yesterday advised shareholders to accept the revised takeover offer by Spectrum Arrangement Sdn Bhd, a unit of the Tan Sri Quek Leng Chan-controlled Hong Leong Co (M) Bhd.
  
  Spectrum, which wants to take Hume private, said those who had already accepted the original offer would be entitled to receive the revised offer.Hume's share price last traded at RM4.48.

Fair because the offer price is raised from 4.30 to 4.50?

A mere 20 sen increase equates to fair????

OMIGOSH!!!!!!!!!!!!!!!

On Star Business: Hume shares rally on raised offer price

• Wednesday March 17, 2010
  
  Hume shares rally on raised offer price
  
  But analyst says RM4.50 is still below group’s net assets per share of RM5.17
  
  PETALING JAYA: Hume Industries (M) Bhd’s share price staged a rally after the company announced that its major shareholder has raised its buyout offer to RM4.50 per share from RM4.30 previously.
  
  The counter jumped 19 sen to close at RM4.48, its highest since June 18, 2007. Year-to-date the counter gained more than 13%.
  
  On Jan 14, Spectrum Arrangement Sdn Bhd (SASB), a wholly-owned subsidiary of Hong Leong Co (M) Bhd, launched a takeover offer for the remaining shares of Hume it does not own at RM4.30 a share.
  
  Hong Leong Co is Hong Leong Malaysia group’s ultimate holding company, in which Tan Sri Quek Leng Chan is a director and substantial shareholder.
  
  According to the announcement, SASB holds 118.8 million shares in Hume, representing about 64.94% stake in the company. Last week, SASB extended the deadline to buy the rest of Hume to March 25. SASB revised the offer price to RM4.50 per share on Monday.
  
  As at March 15, SASB had accumulated 85.89% of Hume shares. Analysts said the first offer of RM4.30 was rather low while the revised offer of RM4.50 was not that high either.
  
  “Although they’ve revised the price, it is still below the group’s net assets per share of RM5.17 as at Dec 31, 2009,” an analyst said, adding that the shares were already trading close to the offer price.
  
  As at Dec 31, 2009, Hume was in net cash position and had cash and cash equivalents of RM362mil, translating into cash per share of RM1.89, and net assets per share of RM5.17.
  
  “I suppose the take-up was not that great and prompted the company (SASB) to revise the offer price upwards. They may have to revise the price if the take-up is still not good unless they manage to obtain more than 90% equity in Hume to trigger a compulsory acquisition,” said another analyst.
  
  Under the regulations, shares from minority shareholders can be compulsorily acquired by SASB if it manages to secure more than 90% equity in Hume.
  
  Meanwhile, independent adviser Public Investment Bank Bhd advised Hume shareholders to “accept the offer.” It said the revised offer represented a premium of 12.5% to 35.1% over the five-day, one-month, three-month, six-month and 12-month volume-weighted average market price of Hume’s shares up to and including Jan 13, being the last market day prior to the takeover announcement.
  
  “Holders should note that the comparison above is based on the historical market price of the Hume shares and there is no assurance that the market price of the Hume shares will continue to trade at the current level in future, after the closing date on April 5,” it said in a filing with Bursa Malaysia.

OMIGOSHHHHHHHH!!!!

Look at the issues mentioned.

1. Below net assets.
2. Ok, they mentioned how much cash Hume has. Yes, it's 362 million cash or cash per share of rm 1.89 per share.
3. Then Public Investment Bank made that nonsensical comparison of the offer price versus the historical traded market price for Hume shares and said THERE IS NO ASSURANCE THAT THE MARKET PRICE OF THE HUME SHARES WILL CONTINUE TO TRADE AT CURRENT LEVEL IN THE FUTURE!

OMIGOSH!!! What silly comments is that? How did Public Investment Bank qualified to be the independant advisor? I wonder who they are advising for? I am EXTREMELY sure they are not advising on behalf of the minority shareholders here.

Yes, for sure THERE IS NO ASSURANCE THAT HUME SHARES WILL CONTINUE TO TRADE AT CURRENT LEVEL but this saying has to be applied for any other shares too!

Yes?

If they are saying this is the case, then perhaps everyone should start selling all their shares too! Why? Follow Public Investment Bank theory mah. No assurance mah.

Err... doesn't that sound extremely silly?

And I am so dumbfounded.

You pick up any research report and you will find them analysts talking about earning prospect.

So how come Public Investment Bank in today's FINANCIAL news doesn't focus on this earnings issue at all?

Why?

Why doesn't Public Investment Bank want to talk about Hume Industries earnings?

Why?

Can someone please tell me why?

Just how much money is Hume Industries currently making?

How about this posting for an answer: Offer For Hume Indistries Is Way Too Low

Look at Hume Industries current earnings posted in that posting.

Hume Industries made some 57.9 million for the first 2 quarters of the current fiscal year. (you can also verify the earnings here: Quarterly rpt on consolidated results for the financial period ended 31/12/2009 ) This equates to an eps of 32 sen. How much do you think Hume Industries eps for the fiscal year to be? Annualised at 65 sen per share? Not possible?

With an eps of 65 sen, based on earnings multiple, how's the offer price of 4.50? Does it sound remotely fair? Or is it grossly unfair?

If you need to count, the offer price is based on an earnings multiple of a mere 6.9x only.

Privatised at 6.9 x earnings multiple? Cash per share of 1.89 per share?

Fair offer?

Who is Public Investment Bank trying to kid?

And mind you, the earnings is based on an assumption that there is no more growth. If the growth outlook is so bleak, I wonder why other analysts are raising the earnings outlook for the steel sector.

MSWG are you even watching?

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ps: How come during privatisation, all these investment bankers, sorry, I mean all these independent investment bankers would always, always paint the bleakest outlook for the company involved?

Just thinking out loud too.. if these companies outlook so bleak, why does the major shareholders want to privatise these companies? Surely not for fun, yes?

And surely not for the sake of letting them investment bankers make some money from this corporate exercise, yes?