Pacific Century Regional Development- Will Richard Li finally privatised the undervalued counter?

[cloudfire]

I understand where they are coming from base on figures like NAV and PE ratio etc etc. But what I'm asking is:
After the free float hits less then 10%, according to SGX rules
1) The company must privatize?
2) A mandatory offer must be offer to the remaining shareholders?
3) Is there any rule on what is the lowest price the company can offer?

What I fear is, if the company does acquire more than 90% of the free float, can they offer a lowball offer of say $0.30 (just an example figure). Then the shareholders will have to choice but to either accept the offer or hold shares of a delisted company.

Any expert can advise on this? TIA.

However, institutional investors in PCRD are saying that the group could actually be worth about 25 per cent more than the current share price.

 

[batdow]

1.63% more to go!

 

[koreanlover]

I understand where they are coming from base on figures like NAV and PE ratio etc etc. But what I'm asking is:
After the free float hits less then 10%, according to SGX rules
1) The company must privatize?
2) A mandatory offer must be offer to the remaining shareholders?
3) Is there any rule on what is the lowest price the company can offer?

What I fear is, if the company does acquire more than 90% of the free float, can they offer a lowball offer of say $0.30 (just an example figure). Then the shareholders will have to choice but to either accept the offer or hold shares of a delisted company.

Any expert can advise on this? TIA.

From SGX rulebook:

723

An issuer must ensure that at least 10% of the total number of issued shares excluding treasury shares (excluding preference shares and convertible equity securities) in a class that is listed is at all times held by the public.

724

(1) If the percentage of securities held in public hands falls below 10%: —
(a) The issuer must, as soon as practicable, announce that fact; and
(b) The Exchange may suspend trading of the class, or all the securities of the issuer.
(2) The Exchange may allow the issuer a period of 3 months, or such longer period as the Exchange may agree, to raise the percentage of securities in public hands to at least 10%. The issuer may be delisted if it fails to restore the percentage of securities in public hands to at least 10% after the period.

1309

If an issuer is seeking to delist from the Exchange:—
(1) a reasonable exit alternative, which should normally be in cash, should be offered to (a) the issuer's shareholders and (b) holders of any other classes of listed securities to be delisted.
(2) the issuer should normally appoint an independent financial adviser to advise on the exit offer.

It seems that if it is not a voluntary delisting, but a compulsory/mandatory one forced by SGX, then the company is in some kind of financial trouble and SGX might not require the company to come up with an exit offer.

http://news.asiaone.com/News/the+Straits+Times/Story/A1Story20100220-199788.html
http://bschool.nus.edu.sg/LinkClick.aspx?fileticket=cmog%2BL701Jk%3D&tabid=1771&mid=5732

I think there is no rule on the lowest price to offer, but logically it should be higher than the last traded price before the delisting announcement.

 

[Keverus]

how high more can this stock go? its like been at this for about a week leow.

it is better actually. if management had just chiong and snap up even more, it will push past the 10% free float too quickly, leading to little time for the management to give an offer price.

more haste, less speed.

 

[koreanlover]

Any expert has comments on this announcement ?

I take it to mean that they should be doing a voluntary delisting but have yet to decide on the offer price ?

 

[mdsummer]

Not an expert, my reading of the announcement is business as usual, no confirmation nor rejection of the acpl letter.

My feel is that it will take a big event for prcd to delist. The buyback is precursor to the actual event.

 

[Asphodeli]

Typical HK company PR, comply with all regulations with no mention of rumor at all. Tread carefully.

Sent from Sony D5833 using GAGT

 

[Keverus]

A) the company will continue to buyback

B) pointless statement

C) they dont want to disclose

D) they dont want to disclose

 

[potatoe8]

From SGX rulebook:







It seems that if it is not a voluntary delisting, but a compulsory/mandatory one forced by SGX, then the company is in some kind of financial trouble and SGX might not require the company to come up with an exit offer.

http://news.asiaone.com/News/the+Straits+Times/Story/A1Story20100220-199788.html
http://bschool.nus.edu.sg/LinkClick.aspx?fileticket=cmog%2BL701Jk%3D&tabid=1771&mid=5732

I think there is no rule on the lowest price to offer, but logically it should be higher than the last traded price before the delisting announcement.

Why logically it should be higher than the last traded price? Why can't they just lowball the shareholders as a previous user has pointed out?

 

[koreanlover]

Why logically it should be higher than the last traded price? Why can't they just lowball the shareholders as a previous user has pointed out?

Cos they need to offer a reasonable price for investors to take up the privatisation offer.
Otherwise, the take up rate might be low and they might need to waste additional time and money to give an improved offer.

 

[Keverus]

Cos they need to offer a reasonable price for investors to take up the privatisation offer.
Otherwise, the take up rate might be low and they might need to waste additional time and money to give an improved offer.

agreed. privatize the company is to make things efficient (no need smlj also report to sgx). wont fall in line with trying to lowball investors. but of course, there is a cap la.

right now it seems like PCRD management is putting the cap of their buyback at 46 cents. but their offer should be in region of 50+ cents.

 

[cloudfire]

But once the free float is <10%, it will be definitely privatized right? Does it matter whether the remaining <10% free float shareholder takes up the offer or not? Does it affect the end result of privatization?

Cos they need to offer a reasonable price for investors to take up the privatisation offer.
Otherwise, the take up rate might be low and they might need to waste additional time and money to give an improved offer.

 

[Keverus]

< 10% will de-list.

if shareholders die die dont want to sell, then they will hold the share lor.

 

[koreanlover]

But once the free float is <10%, it will be definitely privatized right? Does it matter whether the remaining <10% free float shareholder takes up the offer or not? Does it affect the end result of privatization?

PCRD's announcement (post #65) in b) said that they would not conduct the share buyback to such an extent.

 

[hotyrole]

No less than 0.50, don't sell.

Refuse to entertain the 0.46 crowd.

 

[potatoe8]

< 10% will de-list.

if shareholders die die dont want to sell, then they will hold the share lor.

In that case investors will be forced to take the lowball offer then right? They wouldn't want to hold an untradable stock certificate.


Has this happened before on the SGX? Would be interesting to see documented examples.

 

[Keverus]

 

[ufoate]

If I bought at high of 48.5 what should I do now ?

 

[Keverus]

If I bought at high of 48.5 what should I do now ?

keep calm and hold on

 

[batdow]

If I bought at high of 48.5 what should I do now ?

Sell @ 46 and no more worries