SAY NO to The Relisting Of IOI Properties!

On Star Business, a ghastly news was announced!

• Saturday April 13, 2013
  Mixed views on IOI’s plan to re-list property division
  
  PETALING JAYA: Analysts have mixed views on whether the possible re-listing of IOI Corp Bhd's property division would create value for it.
  
  Early this week, a wire report had stated that IOI Corp was planning an initial public offering (IPO) of its property arm in the fourth quarter of 2013, speculating the total value of the listing to be in the region of RM10bil.
  
  This would be a huge improvement in size, considering that it was only in 2009 that IOI Corp had bought back its then-listed property arm IOI Properties Bhd for a mere RM310mil in cash and shares, valuing the unit at about RM1.3bil.
  
  “The plan to re-list its property arm is not new. In our sum-of-parts, we value the property business at close to RM9bil.
  
  “We would be positive if the group lists its property arm, as it would allow it to unlock value and for investors to better appreciate its property division,” said a CIMB Research analyst.
  
  She explained that at the moment, the property division was “hidden” and that there wasn't much visibility in terms of its value, future plans and launches in the pipeline.
  
  “For now, no one knows what IOI Property is worth because it is hidden inside IOI Corp. With the listing, we would obtain more information. We would know a lot more about its launches and future developments.
  
  “If it were to be listed on its own, then IOI Property would eventually be able to find its own value,” said the CIMB analyst.
  
  An Alliance Research analyst pointed out that back in 2009, IOI Corp had taken IOI Properties private as the company was undervalued, trading at 8.4 times versus IOI Corp, which was trading at 15 times back then.
  
  She said that as at IOI Corp's financial year ended June 30, 2012, the total asset value of the property development and investment segments stood at RM7.7bil, contributing a pre-tax profit of RM538mil or 20% of IOI Corp's total pre-tax profit.
  
  “While details on the listing are not known, we have doubts whether the move would add value to IOI Corp, given the latter's rich valuations as compared to most property companies.
  
  “This raises the issue of whether IOI Corp's property division's IPO could be priced at more attractive valuations than IOI Corp,” said the analyst.
  
  She said that IOI Corp was currently trading at a forward price earnings of 20.7 times on 2013 earnings.
  
  Another property analyst added that as IOI Property was currently 100% owned by IOI Corp, there was room for value creation.
  
  “If it were to go for a separate listing, this would mean that the parent company sells down its stake and gets back some value from its assets.
  
  “Perhaps, it could use that money to expand its business or give it back to shareholders,” said the analyst.
  
  The analyst pointed out that a separate property listing would also reduce the risk for the plantations side.
  
  This was because at present, funds from IOI Corp were being used to buy and develop land for its property segment. 

Like I had said before, due to the fact that Bursa Malaysia is a listed BUSINESS entity, a relisting simply means a new IPO and new IPO means more business and I have no doubt that Bursa Malaysia would welcome this relisting with open arms.

I doubt that Bursa Malaysia would care about the minority shareholders who were mightly screwed when IOI Properties were delised back in 2009.

That ghastly and unreasonable privatisation is explained in detail in the posting:Why Is Retail Investing Lacking? (Part II)

In 'short'...

• Now consider this story (the story of IOI Privatisation)
  
  You read about the company venturing into another country, just when that country is announcing some interesting projects. You get optimistic about the company, right? Analysts are optimistic too.
  
  So you invest in it.
  
  Then came another opportunity.
  
  Company announce a share split plus rights issue.
  
  Rights issue can't be that bad, right? Especially when the company is now having hot new project in another country. Times are exciting and the company 'invites' you to invest more money into the company by subscribing to the rights issue.
  
  So you decided to invest more, more so since you noted that the company was also buying back their own shares.
  
  The company shares meanwhile started to announce weak set of earnings. Stocks started to decline.
  
  7 months after you had subscribed to the rights issue, the stock, due to continued weak earnings, fell to its historical lows. The owners of the company too agree that the stock was cheap. So cheap that  they decided to privatise it!
  
  Now get this.
  
  Your cost of shares after the rights issues was 6.25.
  
  The company privatisation offer was a very generous 2.60!!!!!!!
  
  OUCH!!!! 

Now do consider what was written on the Star Business today.

So previously, IOI saw IOI Properties was undervalued. Like a vulture, IOI capitalised on the cheap valuations by taking it private.

Did IOI care about its minority shareholders who had subsribed to the rights issue at 6.25 7 months earlier? My opinion is a simple NO since IOI privatisation offer was a generously ridiculous offer of 2.60!

And IOI even denied publicly the early privatisation rumours!!!!

Yeah, denied publicly but yet the company did the privatisation!!! 

So when the subsidiary was considered cheap, it took it private.

Now to UNLOCK value, IOI Corp wants to relist it again!

Fair game for the minority investors???

You tell me!

!!!!!!

Think about it.

Given such rampant delisting and relisting of companies, how is the stock exchange going to attract retail investors????

Yeah, don't cry if the market lacks retail investors!!!

Remember think about the GAME that it is being played.

When a stock is undervalued, careful... the stock could be delisted via a cheap privaisation offer.

And yeah, they will even dare to tell you it is unfair but hey, the offer is reasonable!!! (Duh!!!)

And now when they want to seak (unlock) value, they want to sell you the shares by relisting it once more!

You like such games?

MSWG Turn To Raise Issue Against NOT FAIR BUT REASONABLE

Yay!

On SunDaily: http://www.thesundaily.my/news/655667

• Investors cry foul over "not fair but reasonable" advice
  Posted on 8 April 2013 - 05:37am
  
  Presenna Nambiar
  
  PETALING JAYA (April 8, 2013): The Minority Shareholders Watchdog Group (MSWG) has come out to say that there may be a need to re-look the methodology in which independent advisers base their advice to minority shareholders, as more and more investors cry foul over the increasing number of "not fair but reasonable" recommendations.
  
  CEO Rita Benoy Bushon (pix) told SunBiz in an interview that the watchdog has been receiving an increasing number of complaints on independent advisers' call to accept takeover offers that are "not fair but reasonable".
  
  Listing requirements stipulate that listed companies that are targets of a disposal of all or substantially all of its assets that may affect its listing status, appoint an independent adviser to objectively assess the merits of the deal for the benefit of minority shareholders.
  
  The "not fair" statement is normally attached to the pricing of the offer when compared to quantitative considerations such as the company's net asset value, whereas the reasonableness of it is based on non-quantitative considerations such as market conditions and liquidity of the market.
  
  Bushon sees merit in investors' frustrations, saying that as an investor who is ultimately faced with the compulsion to exit a listed entity, a major consideration would be getting a fair exit value of their investment.
  
  "The fair pricing is very important and it depends on various factors including the sector the company is in and potential of the business in terms of numbers," Bushon said.
  
  "From MSWG's observation, on the aspect of reasonableness... too much of emphasis is placed on this subjective element with final recommendations to accept the offer in all cases where there is a clear intention to delist the company even though the offer price is grossly unfair with a huge discount to the intrinsic value. This is what the minority shareholders are complaining about," she added.
  
  Bushon also noted that past experiences have seen examples of companies that have not revalued their land for 14 years.
  
  "So (in instances like this) how can you (an independent adviser) ever come up with an advice based on a valuation done 14 years ago. That is difficult to comprehend," she added.
  
  Bushon suggested that perhaps there is a need to re-look the yardsticks and criteria that independent advice letters (IAL) work on, considering investors are reluctant to heed the advice given, as observed by MSWG.
  
  The recent failed attempt by Hong Leong Financial Group Bhd (HLFG) to take Hong Leong Capital Bhd private is an example of one advice which did not convince minority investors, even as independent adviser Affin Investment Bank Bhd had opined that the offer was "fair and reasonable".
  
  HLFG only managed to acquire a 2.24% stake during its offer period.
  
  Petroliam Nasional Bhd's (Petronas) offer for MISC Bhd also saw resistance from minority shareholders despite the independent adviser on the deal, AmInvestment Bank, asking minority shareholders to accept it, after calling it "unfair but reasonable".
  
  This resistance eventually made Petronas, which had been adamant that RM5.30 a share was the "right price", to revise its offer to RM5.50 per share at the eleventh hour on Friday.
  
  The rules governing IALs have undergone a few changes over the years, kicked off by a consultation paper published in March 2010, seeking feedback on proposed updates to guidelines on offer documentation of the Malaysian Code on Take-overs and Mergers.
  
  What started out as a call for comment and advice by independent advisers on the reasonableness of an offer, evolved to one which set standards that needed to be adhered to when analysing the fairness and reasonableness of a takeover offer.
  
  Then in September last year, it was decided that the two considerations: fairness and reasonableness, be independent of each other. This allowed for independent advisers to recommend that investors accept an offer even if one of the considerations was not up to mark.
  
  Three months later in December last year, the Securities Commission (SC) released another document called the "Best Practice Guide on Independent Advice Letters" for another round of public comment.
  
  The SC said the guide is to clarify the SC's and Bursa Malaysia's views on the role of an independent adviser, and to provide guidance on the standards of disclosures in IALs; and augment both regulators' continuous efforts in raising standards of corporate governance through the promotion of high quality disclosures.
  
  "Perhaps another suggestion is to have an over-the-counter platform for those minorities who wish to still remain in the delisted entity until and unless a compulsory acquisition is triggered," said Bushon.
  
  "This would motivate majority shareholders to offer a better price at the outset and the minority would be more fairly dealt with. (But) this suggestion needs to be studied more in detail with the implications." 

 Remember this....

If we continue to allow NOT FAIR BUT REASONABLE advise to continue to be dished out to the minority shareholders, we are sending one clear message, which is, you minority shareholders, it is reasonable to accept offers that are not fair!!.

Is that acceptable??????

Investment Adviser: Just Who Are You Advising For?

From the posting: Business Times Writes About Unfair And Reasonable!

limko said...

• What comes to mind is the two occasions when Pharmaniaga planned for privatisation.
  On the first privatisation, "independant adviser" advised not to accept the offer, and the exercise did not go through. Subsequently, the price of Pharmaniaga slummed.
  On the second privatisation, another "independant adviser" advised to accept, and the exercise completed. Subsequently, the price of Pharmaniaga soars.
  On both occasions, the mionrity shareholders got screwed.
  Advise or lie?

 Good point.

For me, right now, there's indeed some changes when compared to previous years but I would say it's nor enough.

The next step is, we need our minority shareholders to be better advised.

An unfair order is unfair. End of.

It should be rejected.

Calling it 'unfair but reasonable' is just not acceptable.

Business Times Writes About Unfair And Reasonable!

After making several postings on this issue, If The OFFER is NOT FAIR, how can it be REASONABLE?. and How could it be reasonable to accept an offer which is deemed not FAIR?, Business Times decided to post an opinion on it too. :)

• Investors want 'KISS', not word games
  
  Published: 2013/04/06
  
  STICK TO THE BASICS: Shareholders need crystal clear explanation from those independent advisers
  
  WHAT is "not fair but reasonable"? For the life of me, I cannot understand the meaning of it.
  
  These days, such term is used so frequently by independent advisers when advising minority shareholders on the worthiness of a corporate exercise.
  
  Who pays the independent advisers? If a public-listed company does, then, in theory, all of its shareholders pay for their service. Hence, the shareholders should get a crystal clear explanation from the highly-paid independent advisers.
  
  The catch is not on who pays them, but rather, who is in charge of hiring them.
  
  Are corporate fees too tempting that layman investors are forced to put up with reports that highlight proposals as being "not fair but reasonable"?
  
  Looking back, the only thing that pops into my mind as being unfair but reasonable is being caned in school.
  
  Mind you, my "not fair but reasonable" assesment on being caned at schools comes more than two decades after the incident had happened.
  
  I had aged and, presumably, gained some wisdom in coming to that conclusion.
  
  In the action-packed world that we live in, an average investor does not have the liberty to wait for 10 or 20 years to see if a deal, proposed in the current time, is indeed "not fair but reasonable".
  
  As my first boss in Business Times once told me, KISS! (short for "keep it short and simple") So, why can't independent advisers (aka merchant bankers in disguise ) just stick to facts and keep their Shakespearean instinct in their closets?
  
  Independent advisers who fancy themselves as talented writers and poets should quit the merchant bank industry altogether.
  
  Let's go back to the basics. Independent advisers must only be allowed to recommend to shareholders either to accept or reject a deal.
  
  If they ask shareholders to accept a certain proposal, then it should be on the assumption that it is a fair and reasonable one.
  
  Rejecting the proposal should be on the basis that it is unfair and unreasonable.
  
  Independent advisers should not be allowed to be politically correct by disguising a bad proposal as "unfair but reasonable".
  
  Before the next independent adviser contemplates keying in a proposal as "unfair but reasonable", take a minute to unwind by listening to Bob Dylan's "Gotta Serve Somebody".
  
  The lyrics go something like this: "You may be the heavyweight champion of the world. You may be a socialite with a long string of pearls. But you're gonna have to serve somebody, yes indeed. It may be the devil or it may be the Lord."
  

How could it be reasonable to accept an offer which is deemed not fair?

How difficult can it be?

You simply cannot have them independent advisers issuing moronic statements proclaiming that an offer is not fair but reasonable.

It makes utterly no sense.


If such an advice from these so-called professional investment advisers are allowed to continue than the simple message you are sending out is that any listed company owners can continue to simply make unfair offers to their business partners, the minority shareholders, screwing them them of their legal rights to receive a fair share of what the company is worth.

Is the word FAIR non-existent in the world of the stock market?

Telling minority shareholders to accept the offer despite the offer being unfair is the ultimate betrayal to the minority shareholders.

How could it be reasonable to accept an offer which is deemed not fair?

If the answer is no, then why is them independent advisers given the freedom to issue moronic advice of 'NOT FAIR BUT REASONABLE'?

Think about it......

If The OFFER is NOT FAIR, how can it be REASONABLE?

On theSunDaily Business: http://www.thesundaily.my/news/645150

• MBf take-over offer not fair but reasonable
  Posted on 25 March 2013 - 10:12pm
  Last updated on 25 March 2013 - 10:51pm
  
  PETALING JAYA (March 25 ,2013): The offer for the shares and warrants of MBf Holdings Bhd by a consortium of three companies led by major shareholder Tan Sri Ninian Mogan Lourdenadin, are deemed not fair but reasonable, according to independent adviser Affin Investment Bank Bhd.
  
  "However, we are of the view that the offer for the shares and the warrants are reasonable based on our evaluation and also taking into consideration that there have been no alternative offers received to date," it said, advising that shareholders and warrant holders accept the offer.
  
  In an independent advice circular yesterday, Affin Investment said the offer for the shares is not fair, given that the share offer price is below the derived valuation range of MBFH shares of between RM2.45 and RM3.20.
  
  The offer represents a 30.6% and 46.8% discount to the adjusted net asset range of the group. The offer for the warrant is also not fair, given that the warrant offer price is derived by reference to the share offer price.
  
  Tor Pte Ltd, Nadin Holdings Sdn Bhd, Impact Action Sdn Bhd and Market Share Investment Ltd through Hong Leong Investment Bank Bhd has proposed to acquire all the remaining shares in MBf Holdings and all the remaining warrants which are not already held by the joint offerors for RM1.70 per share and RM0.70 per warrant
  
  Affin Investment Bank said the sale of MBF Cards was a loss of significant contribution to the group's profitability.
  
  The fact that the group's business is largely concentrated in the South Pacific Island, which are perceived as remote markets, following the disposal of the MBF Cards, was also seen as a negative point.
  
  The heavy losses incurred by the group's shipping segment since FY ended Dec 31, 2010 which had drained the group's cash reserves, was another.
  
  MBf's revised offer will be open for acceptance until 5pm on April 3.

Incomprehendable advice!

If an offer is not fair, then it only means it is not fair.

Think about it.

Does it make sense to accept an offer that it is not offer?

Does it?

If it doesn't make sense, how then can it be reasonable?

Oh my England!!!!!!!!!!!!!!

No wait... I forgot. This is the stock market. The minority shareholders is there to be screwed. And what better way to screw the minorities than to have investment advisers making advice such as not fair but reasonable!!!!

MBF's Increase Offer Still Isn't Fair.

As mentioned yesterday, MBF had increased its privatisation offer.

• PETALING JAYA (March 15, 2013): The controlling shareholder of MBf Holdings Bhd (MBfH) has revised upward his takeover offer for the remaining shares of the group to RM1.70 from RM1.50 and the offer for its remaining warrants to 70 sen from 50 sen previously. http://www.thesundaily.my/news/637245

 Is 1.70 enough?

Not even close.

Come on, the offer could and should be more generous!

Let me use the data from yesterday news.

• Currently, he already owns 535,685,704 shares, or 92.77% stake, in the company.

 MBF total shares is 577,423, 224.

Effectively, he's trying to buy up the rest of the shares or 577,423, 224. - 535,685,704 = 41,737,520 shares.

At 1.70 a share, he's paying 41737.520 * 1700 = 70.953 million.

Yes, that's his cost of privatisting MBF. (ps: this calculation is not 100% accurate because it's based on the news report. By right, I should count his cost of buying out the warrants too)

Here comes the multi million ringgit question.

MBF Cards was sold for how?

Yes, how muchie?

How? How?





Yeah.... see my thinking?

I believe the offer to buyout the rest of the MBF shares should be much more.

The owner, already own the bulk of the company already. To buy out the rest, won't cost him too much money. So I hope the offer should be fair to the shareholders of MBF Holdings.

Dare I say, show me 2.50?

Shareholders SO UNHAPPY with MBF

The following was posted on the Edgemalaysia.

• Minority shareholders unhappy with MBf   Business & Markets 2013
  Written by Shalini Kumar of theedgemalaysia.com   
  Thursday, 14 March 2013 10:18
  
  KUALA LUMPUR: Minority shareholders of MBf HOLDINGS BHD [] (MBfH) are hoping the authorities will delay the suspension of the company until a dividend payment — which they were looking forward to following the sale of the MBF cards business in September last year — has been paid out.
  
  A minority shareholder said yesterday a group of them had sent a letter to Bursa Malaysia, the Minority Shareholder Watchdog Group and the Securities Commission appealing against the suspension of MBfH shares that will take place five days after the issuance of an independent advice circular (IAC) to shareholders — in relation to a takeover offer being done by major shareholder Tan Sri Dr Ninian Mogan Lourdenadin.
  
  Lourdenadin, who now holds 92.77% of the company, launched a takeover on Feb 7, offering RM1.50 for the shares,  50 sen for the warrants and RM4.64 for the Redeemable convertible secured loan stock (RCSLs). When he launched the takeover, he had 87% of the shares.
  
  On Feb 27 after his stake increased to more than 90%, the company said the stock would be suspended five days after the issuance of the IAC.
  
  But the stock will continue to be listed as Lourdenadin cannot compulsorily buy the rest of the shares because the acceptance level has not reached the required threshold.
  
  For an offeror to compulsorily buy all the shares, the acceptance level has to be more than 90% of the outstanding shares at the point of making the offer. In this case, it should reach an acceptance level of more than 98%.
  
  A minority shareholder said they would accept the offer provided the dividend payment was made from the proceeds of the disposal of MBF Cards.
  “We will support the major shareholder’s bid to take over the company as per the price offered after the special dividend is paid,” he said.
  
  Proceeds from the sale of the cards business of RM172.07 million, if distributed, works out to about 30 sen per unit.
  
  It is understood that the IAC was to have been released last week, but this has yet to happen.
  
  Another minority shareholder feels the independent directors are not paying attention to safeguarding the interest of the minority.
  “I don’t think it’s right that the independent directors jumped the gun and sold their shares even before the IAC was released.
  “I’m all right with the decision to take the company private. But independent directors should act in the interest of the minority,” he said, adding that he feels the take-over offer of RM1.50 per share is not a fair price.
  
  “The stock is currently valued at RM2.37 per share. How can we be happy with an offer price that is low?
  “Also, if the takeover were to be successful, it would deprive us of what is owed in the first place. It’s not right to have something printed in black and white and then not follow through with it.”
  
  At the close of trading yesterday, MBfH was flat at RM1.52, having reached an intra day high of RM1.59.
  
  On Monday, Lourdenadin extended the takeover offer by another two weeks to April 3, from the original date of March 20.

And ....

• MBF hits 9-yr high amid demands for higher takeover offer   Business & Markets 2013
  Written by Chong Jin Hun of theedgemalaysia.com   
  Thursday, 14 March 2013 10:59
  
  KUALA LUMPUR (Mar 14): MBf HOLDINGS BHD [] (MBFH) soared as much as 17% to its highest in over nine years amid minority shareholders' unhappiness over the takeover offer  by the diversified company's controlling shareholder,  dealers said.
  
  At 10.47 am, MBFH shares were traded at RM1.75 with some 955,000 shares done, placing the stock among ten top gainers. The stock had earlier risen as much as 26 sen to RM1.78 --  its highest since June  2003, Bloomberg data show.
  
  A dealer said the gains in MBFH shares were due to investors are asking for a higher offer from Tan Sri Dr Ninian Mogan Lourdenadin, who is offering RM1.50 a share to take over the firm.
  
  "The public will reject the offer as they are not happy. Minority shareholders are hoping that the acquirer will offer a higher price,"  the dealer told theedgemalaysia.com.
  
  The edgemalaysia.com yesterday received calls from some shareholders saying they were even prepared to go to court on this.
  
  Ninian had owned 87% of MBFH when he offered to buy the remaining shares of the firm at RM1.50 each on February 6 this year.
  
  He also offered to acquire its remaining warrants at 50 sen each and outstanding redeemable convertible secured loan stocks issued by MBFH’s wholly-owned subsidiary Wellink Invesments Ltd at RM4.64 each.
  
  For the exercise to succeed, the acquirer will have to secure an acceptance level of more than 90% of the remaining 13% stake he plans to acquire. This means Ninian's stake in MBFH will have to go up to 98.7% for the takeover to go through.
  
  However, that has not happened so far. Exchange filings show that his latest reported equity portion had only touched 92.77%. As such, the deadline for the offer has been extended to April 3 from original date on March 20.
  
  Minority shareholders are unhappy with the offer as they feel the price does not reflect the true value of the firm. The offer price of RM1.50 per MBFH share is a 37% discount to the company's latest reported book value per share of RM2.37.
  
  MBFH’s website indicates that the firm was initially set up as a private limited entity on October 10 1963 before it was converted to a public limited company on October 21 that year under the name Island Hotels & PROPERTIES [] (M) Ltd.
  
  The firm had, subsequently, changed its name to Island Hotel & Properties (M) Bhd and Pacific Development Credit Bhd on April 15 1966 and May 26 1976 respectively before adopting its current name on July 20 1981.
  
  MBFH’s businesses include real estate, financial services, and education. The firm also operates tea, coffee, cocoa PLANTATION []s.

My say?

The shareholders should be given a fair share from the sale of MBF Cards.

It is the ONLY FAIR thing to do.

Please stop screwing the shareholders!

Subsequently..

• Controlling shareholder ups MBf takeover price to RM1.70  
  Business & Markets 2013
  Written by Kamarul Anwar and Shalini Kumar of theedgemalaysia.com   
  Thursday, 14 March 2013 14:50
  
  KUALA LUMPUR (Mar 14): In an apparent attempt to sweeten the deal, MBf HOLDINGS BHD []’s (MBfH) CEO and largest shareholder Tan Sri Dr Ninian Mogan Lourdenadin has raised the takeover offer of its shares to RM1.70 per share and 70 sen per warrant, in order to take his company private.
  
  However, the revised offer price for MBfH’s shares is still inferior to the company’s book value of RM2.37 per share, or 39.41% higher than the new offer price.
  
  In a filing to Bursa Malaysia, the group said that the joint offerors – comprising Tor Private Ltd, Nadin Holdings Sdn Bhd, Impact Action Sdn Bhd and Market Share Investments Ltd – have revised the offer prices of the shares from RM1.50 apiece and the warrants from 50 sen apiece.
  
  The filing also stated that minority shareholders who have accepted the previous offer will receive another 20 sen per share or 20 sen per warrant to match up the new offer prices.
  
  The new offer price for MBfH’s shares is at a 22 sen or 14.86% premium to the closing price of RM1.48 on February 5, 2013, which was the last trading day before the takeover offer was officially made.
  
  The revised offer price for its warrants is also 27 sen or 62.79% higher from the closing price of 43 sen on the aforementioned date.
  
  Lourdenadin, who had previously attempted to take MBfH private in January 2013, has extended the takeover offer by two weeks to April 3 -- from March 20 -- in a bid to mop up all the remaining MBfH shares he does not own.
  
  Currently, he already owns 535,685,704 shares, or 92.77% stake, in the company.
  
  For an offeror to compulsorily buy all the shares, the acceptance level of has to be above 90% of the outstanding shares he does not own at the point of making the offer. In this case, it should reach an acceptance level of more than 98%.

Investing In A Relisted Stock?

• "We study the past to understand the present; we understand the present to guide the future." -- William Lund.

Think about it.

In terms of the stock market, we need to study/understand the stock past. The stock history's tells us what has happened to the stock before and what had happened before could happen once again in the future.

An investor invests for the long term. The long term gives the investor the edge and allow the investor to reap the benefits of seeing the investment grow over time. The time factor is crucial.

However, what if.

What if the time factor turns out to be a risk?

For example, is it a good idea to invest in a stock which had been relisted again?

Think about it.

We are seen many companies whose stock was taken private cheaply in the past getting relisted once more. These companies have turned the stock market into their own playground where they can list and delist their stocks based on their own fancy.

That is the stock past.

The risk, of course, is the delisting could happen again in the future.. In such case, the time factor becomes a risk. The longer time the stock is listed, the greater the chance the stock could be taken private if the stock is trading cheaply.

You invest in Kow Kow stock at 2.00, which is a 10% discount over its relisting IPO price. Five years later, a crisis could happen to the stock market causing Kow Kow to trade at 1.20.

Yes, in most cases, when the stock trades at super low valuations, funds would come in and invest the stock. That's the mechanism of the stock market. Stock prices come up and they do come down. The problem is the owners see the cheap valuation too. Instead of implementing company stock buybacks, the owner do a private buyback. They buy back these shares but via a privatisation offer, benefiting themselves and not the minority shareholders. So the owner launches a privatisation bid at 1.56, which is a so-called impressive 30% premium over the stock price. But what good is such a premium to Kow Kow stock investor who had bought the stock at 2.00?

The investor can mount an outrage and then hope and pray that the privatisation bid fails.

But what good would it do?

Wouldn't it be better if the stock had taken the prevention is better than cure route?

Know the stock past. Don't let the stock past hurt us. Don't let a company who is a chronic privatisor fool you and your money.

Protect yourself is always much better than hope others to protect you.

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?

Seriously?

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.

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???

WTH?!!!

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.

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.

Agree?

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.

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!

Godspeed!

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.

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 M.A. Wind of Corporate Governance In Malaysia asks this very important question: BRDB, who is behind 33% of the shares?

A very important question NOW given the fact that Ambang Sehati is trying very desperately to delist the company.

It's rather very clear according to my flawed mindset that the four prime assets that BRDB owns is extremely valuable.

First Ambang Sehati tried to buy those four prime assets, now it plans to buy up the entire stake of BRDB in an effort to gain full control of those four assets.

Sell to them or they will seek to withdraw the listing status!

What a threat!

How could this even happen in corporate Malaysia?????

Sigh.

If you are a BRDB shareholder, do you know what you should do?

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.

Godspeed!

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.

Want To Go For Astro IPO?

Posted on the EdgeMalaysia: http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=219033&Itemid=79

• Astro Malaysia to take one-third of IPO proceeds Written by Cindy Yeap of theedgemalaysia.com 
  Thursday, 23 August 2012 09:15
  
  KUALA LUMPUR: The re-listing of Astro Malaysia Holdings Bhd is expected to raise some US$1.75 billion (RM5.47 billion) from the sale of 29.2% of the company.
  
  However, only 31.2% of proceeds raised from the sale of up to 1.52 billion new and existing shares at the comeback IPO will go to Astro Malaysia, according to an updated draft prospectus dated Aug 17 on the Securities Commission’s website. Of the total 1.52 billion shares, slightly over a billion shares are sold by existing shareholders T Ananda Krishnan and Khazanah Nasional Bhd, while the rest are new shares.
  
  From the sale of the 474.3 million new shares estimated to net around RM1.7 billion, some 58% of gross proceeds has been earmarked for capital expenditure, while 29.35% will go to repay bank borrowings. This leaves 8.6% of proceeds for general working capital and 4.1% for listing expenses.
  
  Astro Malaysia, which is expected to come to market in September, did not provide an indicative pricing in the updated version to the initial draft released on Aug 8.
  
  Nonetheless, the IPO is expected to raise RM5.47 billion for the company and its controlling shareholders using the indicative price of RM3.60 apiece that a Reuters report last week said bumiputera investors had been offered.
  
  This values Astro Malaysia, which is listing without its foreign operations in India and Indonesia, at RM18.7 billion — significantly above the RM8.3 billion the old ASTRO ALL ASIA NETWORKS PLC [] was worth at the RM4.30 privatisation price. Like the re-listing of Ananda’s Malaysian mobile arm Maxis Bhd, Astro Malaysia is widely expected to market itself as a dividend play, having promised a minimum pay-out ratio of 75%.
  
  Astro Malaysia is widely expected to market itself as a dividend play, having promised a minimum payout ratio of 75%.
  
  Ananda,who privatised the pay TV operator with Khazanah two years ago, will continue to control about 50% of Astro Malaysia’s enlarged share base post-IPO. Khazanah’s effective interest will be 20.8%, according to the updated draft document, bringing their collective interest in Astro Malaysia to 70.8%.
  
  The updated document also named former Chief Justice of Malaysia Tun Zaki Tun Azmi as Astro Malaysia’s independent non-executive chairman, with Usaha Tegas Sdn Bhd director Augustus Ralph Marshall as executive deputy chairman.
  
  Set to be Malaysia’s third largest IPO so far this year after Felda Global Ventures Holdings Bhd and IHH Healthcare Bhd, some 1.26 billion shares or 95% of Astro Malaysia’s offering are for institutions. Of this, some 597.69 million shares or 11.5% of the company’s enlarged share base will go to bumiputera investors.
  
  This leaves 259.87 million shares, or 5% of its enlarged share base, for the retail offering, including that for Astro directors, employees, contractors and customers. The pool for the general public is 103.95 million shares or 2% of Astro Malaysia’s share base, half of which are for retail bumiputera investors.
  
  As at April 30 this year, Astro Malaysia had RM479.1 million cash. Borrowings and finance lease liabilities stood at RM3.69 billion, of which RM3.66 billion is long-term liability.
  
  While its 3.1 million customers already account for over 50% of Malaysian householders, Astro Malaysia said there is still growth to be had. Astro Malaysia intends to stay the market leader with continued investments of RM1 billion annually in content. It also intends to derive new income stream from smart and targeted marketing of additional products to its existing customer base.
  
  Listing without the foreign pay TV operations housed under the de-listed Astro All Asia Networks, Astro Malaysia would be sheltered from the on-going courtroom disputes between Ananda and former Indonesian partner the Lippo Group as well as the wider group’s run-in with authorities over corruption allegations in India that has yet to be fully laid to rest.
  
  CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and RHB Investment Bank Bhd are joint principal advisers for the IPO.

Taken private at 8.3 Billion.
Seeks relisting at 18.7 Billion???

LMAO!!!

Are they really serious?? Can life be soooooooooooooooooooo good????

Want to go for this new listing?

And mind you, just like Maxis, Astro is seeking listing without its overseas operations!!!

Do refer this past posting on 31 March 2010: Astro Privatisation And Sun Direct TV's Immense Potential. Allow me to post the following from that posting.

====>>>>

Then the following statement from him struck me.

• "(Astro) has better value in being taken off the market with the current stage of development of high definition television (HDTV) and the Indian market,"

The Indian market.

Aha!

This reminds me of Aircel!

Flashback the posting: Regarding Aircel and Maxis. It seems that as mentioned in a Business Times article in Nov 2009, Aircel had 26 million subscriber growing at one million new subscriber per month!

That was the jewel in Maxis.

The incredible growth in Aircel.

Which got me asking, what about Astro's growth in India.

Sun Direct TV.

So I asked Google.

http://www.afaqs.com/perl/media/story.html?sid=26440

• As per its website, Sun Direct reaches approximately 5.3 million homes, whereas Tata Sky has a subscriber base of more than 4.5 million and Dish TV has about 6.5 million subscribers.

That article was dated 4th March 2010. Here's a newer one. DTH aims peak subscriber growth in FY'11 on back of sports

• Tata Sky has 16 per cent of the incremental subscriber growth while Sun Direct has 21 per cent and Big TV 12 per cent, the sources add

Sun Direct has 21% subscriber growth?????

And here is from Sun Direct own website. http://www.sundirect.in/media.php

Check this out.

7th July 2008 http://www.sundirect.in/mediaDetails.php?mediaId=2

• Sun Direct TV Pvt. Ltd one of the leading DTH service provider announces the achievement of 1 Million DTH subscribers in 200 days.The one million subscriber base comes from only 4 southern states i.e. Tamil Nadu, Karnataka, Kerala, Andhra Pradesh and the union territory of Pondicherry.
  
  On the eve of this 1 Million subscriber achievement , Sun Direct has launched 14 add-on packages ranging from as low as Rs. 10/- to Rs. 140/- "Packages to suit every pocket" in a "Pay for what you watch" concept for the very first time in Indian DTH scenario.

1 million subscribers in 200 days! WOW!

8th April 2009. http://www.sundirect.in/mediaDetails.php?mediaId=5

• Another landmark achievement for us is crossing the 3 million mark subscriber base by March 2009, as committed earlier; this achievement qualifies us to be the No 2 service DTH provider. In the coming fiscal year we look forward to occupy the pole position. We have added more customers than any other DTH player in the last one year and in the coming days we will be adding more innovative features, services and channels in our offerings.” Added Mr. D'Silva

From July 2008 to March 2009, Sun Direct went from 1 million subscribers to 3 million subscribers!!
Sep 2009. http://www.sundirect.in/mediaDetails.php?mediaId=7

• Fastest growing DTH player to touch 4 million base in less than two years time
  Chennai, 7th September, 2009: Sun Direct Pvt Ltd, the leading direct-to-home (DTH) service provider in the country achieved another milestone by crossing the 4 million subscriber base; the fastest growing player in the DTH market to do so in under two years, since its launch in December 2007.
  
  Setting up a scorching growth pace in the market with its Value for Money offer, right regional content mix, deep distribution across the country and offering flexi-content pricing, all of which have enabled Sun Direct to become the fastest growing DTH player in the country today.

4 million subscribers now!!!!

What incredible growth!

How?

Don't you think Sun Direct is a company with incredible potential?

Then the Maxis saga, the listing, delisting and relisting came to mind.

Hmmm... very much possible, yes? What if Astro delist... goes private.. and relist only the Malaysian operations only. Just like Maxis. Dare we say not possible? The new Astro without Sun Direct! Just like Maxis without Aircel.

I know I am usually wrong, so could I be wrong here?

=====>>>>
Yessir!

Spot on!

Astro now wants to relist without Sun Dircect and they want to sell you this IPO at a more expensive price!!!!

Duh!

Life is so good, yes?

So how is Sun Direct doing today?

Last year, Sun Direct was reported to have 7 million subscribers! http://ibnlive.in.com/generalnewsfeed/news/sun-direct-surpasses-seven-million-subscriber-base/802624.html

Remember company only started in 2008. By 2011, it had 7 million subscribers. What an incredible growth rate. (And apparently by March 2012, Sun Direct now has 7.5million subscribers! http://en.wikipedia.org/wiki/Sun_Direct#cite_note-9 )

Yeah, Sun Direct USED to belong Astro All asia.

But now they want to relist Astro but without Sun Direct!!!

I wonder how those who sold their Astro All Asia shares feel now......

Now do you understand why companys are delisted and relisted again?

ps: Regarding the IPO. I have no idea how this BRAND new IPO will perform. I am just not interested to know. All I know is I want no part of such!