Proposal
Tang brothers are offering shareholders 65cts per share.
If acceptances > 90%, they will pay 70cts.
Background
This is the 2nd effort to privatise the company.
First time in Oct 2003 at the then offer price of 42cts was voted down.
There was an episode with UOB Bank on the financing extended to CK Tang. Based on my memory, CK Tang has secured re-financing from an alternative source after paying an early settlement fees to the tune of million of dollars.
Question
Is the current price a fair offer for a stake in a very very very prime real estate albeit in a competitive retail business and rapidly improving hotel business?
If the shareholders had accepted the offer in 2003, a shareholder would have missed on about 15% per annum rate of capital appreciation.
Minority shareholders, please do not be distracted by the poor health of Mr Tang Wee Sung. As a human, I am sorry to hear that.
But please justify the economic basis for the offer.
P/S - I have no C K Tang shares as of today.
1 comment:
News Update
As of 29 Dec 2006, 5pm, the offer concluded with less than 1% acceptance.
What the offer has done is to awaken the investors to a reasonable valuation of C.K. Tang.
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