Olam

Olam: On the Temasek cash offer, StanChart guides few possibilities on why, and why now: 1) Temasek is comfortable with Olam and wants to increase its exposure to the structural ‘more mouths and bigger wallets’ food theme, before price rise further on higher agri-commodity prices 2) To reduce free float, ahead of possible later privatization later 3) This is pre-cursor to a change in capital structure, with the family sell-down at this stage a rout toward securing cash to support a rights issue. StanChart downgrades Olam to In-Line (from Outperform) but TP is revised upwards to $2.23 from $1.93 (latter TP was set in Nov last year)