IPC

IPC: Counter surged to a peak of $0.188 in early trading after majority shareholder Oei Hong Leong launched a mandatory conditional cash offer of $0.17/share.

Oei's stake increased from 29.8% to 30.6%, after he acquired 6.3m shares over the market yesterday (1 Apr), at $0.169-0.170/share.

If the offer turns unconditional, the offer price will include IPC’s FY14 dividend of 0.6¢.

We note that just a couple of days back (30 Mar), IPC disclosed that the group is negotiating to sell its remaining seven hotels in Japan for ~$150m.

If the deal goes through, the $150m would clear IPC's debt of $103m and bring its cash pile to $148m, or $0.1734/share.

Hence, we reckon that shareholders are unlikely to accept the offer.

At the current price, IPC is valued at 24% discount to its NAV of $0.244.