Sound Global

Sound Global: Formal delisting expected on 27 Jan, following Chariman’s exit offer of $0.70/sh. The final closing date of the exit offer is set for 17 Jan. As of 3 Jan, only 0.34% of total shareholders had accepted the exit offer, while the chairman held 56.02% of the total issued shares. Unlikely to see further acceptances during the remaining offer period, (6-17 Jan), as the share price has surged 9.2% to $0.775 on SGX, and 10.5% to HK$4.85 on HKEx, well above the exit offer price of $ 0.70. Barring any major surprises, shareholders remaining on the SGX will be moved to the HKEx, following completion of the delisting, at the chairman’s expense. The entire process is expected to be completed by Feb. StanChart believes the deal’s completion will be a positive start for the company in 2014. Valuations are attractive at 12-13x 2014-15E PER, and versus its peers’ 16-30x. The company’s strategy of expanding into the BOT/O&M segments could provide a re-rating opportunity in the long term. The house reiterates its Outperform rating with TP $0.86.