Still can see Wheelock from here.What is the transaction?
Wheelock Properties bought a 10% stake in SC Global Developments. Simon Cheong (SC) sold his shares at @$6 for a total value of $112.1mio.
FYI - SC Global closed at $6.45 on Jun 22, 2007.
My objective here is to attempt to understand why the buyer bought and why the seller sold.
Why did Wheelock buy?
David Lawrence, its Chairman and CEO, explained in today's BT ie. 23 Jun.
They think they are buying into good, well-managed companies with a sense of style, and a good brand name.
- It allows Wheelock to buy into property firms that can hold on to land for longer term. Wheelock, though listed in Singapore, is considered a foreign company and thus faces restrictions.
- Wheelock has a track record of such investment in the past when it bought 20% of Hotel Properties (HPL) @$1.80 for a sum of $171.4mio. Today, HPL's last traded at $6.15 per share.
My view
Should we tap on the homework done by David Lawrence and its able team of directors and management, in deciding whether we should place our savings with SC Global?
Based on HPL and other successes that Wheelock have logged in todate, I think it is valid to follow albeit for medium to long term view. It will take for SC to fully unlock the full value of the landbank acquired to date. And I really don't think young Simon is in a hurry to do so.
Why did Simon Cheong sell?
No official words from him yet. Thus I hereby speculate.
- To Simon, maybe it is good to bring another brand name shareholder to its stable.
- Wheelock's database of buyers could be tapped upon in his attempt to sell SC's projects at $3,000 or more per sq. ft.
- Maybe young Simon thinks it is a good time to take some monies off the table given that SC Global's share price has gone up so much. Is he saying that in the near term, $6 plus per share is about right?
Upside could be limited in the near term.
But there will be upside as old Wheelock wanted to buy more but young Simon said 10% divestment is enough.
1 comment:
Well young Simon Cheong has started INVESTING the spare cash he is getting from old Wheelock by buying a freehold bungalow at Garlick Avenue for $7 million at auction.
For a picture of the nice bungalow he bought, pls click http://www.businesstimes.com.sg/sub/news/story/0,4574,238952,00.html?.
Friends, opportunities are everywhere. Open our eyes!!
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