And PMI Minorities Are Rewarded So Handsomely With This Privatisation Offer

Remember:

• "Pan Malaysian Industries Bhd (PMI) yesterday told Bursa Malaysia that it had received an unconditional takeover offer from a consortium of three companies at a cash offer price of 4.5 sen for each offer share."

Remember:

1.  18 May 1993. A 4 for 1 rights issue at 80 sen.
2.  31 Jul 1998. A 1 for 1 rights issue at 50 sen.
3.  19 Jun 2000. A 1 for 1 rights issue at 55 sen.
4. And lastly it had a 2 into 1 share consolidation.

Here's a simple question.

Has the minority shareholder being rewarded handomely by this 4.5 sen offer?

Let's look at a simple study where I assume a minority shareholder, named Ah See, owns 1000 shares of PMI at 0.50.

Ah See initial investment is rm 500.00

Let's see what happens to Ah See if Ah See held on as a minority shareholder till this very day.
1. 1993: 4 for 1 rights issue at 80 sen.

So Ah See's 1000 shares becomes 5000 shares.

Ah See tops up 3200.00

2. 1998: 1 for 1 rights at 50 sen.

So Ah See's 5000 shares becomes 10000 shares.

Ah see tops up another 2500.00

3. 2000. 1 for 1 rights issue at 55 sen.

Ah See's 10000 shares becomes 20000.

Ah See tops up 5500.00

Shares are then consolidated. 2 into 1.

So Ah See's number of shares shinks to 10000.00

Total top up 11,200.00

Initial cost 500.00.

Total investment: 11,700.00

PMI now gets privatisation offer at 4.5 sen.

Ah See own's 10000 shares. That means he will get 4500.00  450.00 ( oops! One zero too much! ) back if he accepts this privatisation offer.

Gulp!

Errrrr...... errrr...... errrrrrr...... do you think Ah See got rewarded handomely or do you think Ah See got screwed?