Q & M: (S$0.91) Sale of vendor shares
Q & M’s management under Quan Min Holdings, Heritas and four moratorised shareholders are selling a combined 8% of their stakes, representing 6% of Q&M’s issued shares.
The moratorium of the four shareholders was partially lifted by the board for the vendor sale.
Typically, Q & M issues shares as part considerations for almost all its acquisitions. The board views that the partial lift is required to maintain Q & M’s value in future acquisitions, which is expected to help the company's growth trajectory.
Participation by all its strategic shareholders in this sale through an agreement should ensure that interests remain aligned and shareholders who had sold their businesses to Q & M continue to contribute.
Maybank-KE believes completion of the stake sale will enable the group to pursue further growth through acquisitions and should have limited impact on operations.
Post sale, management continues to hold a substantial 48% stake.
Maybank-KE maintains Buy and TP of $1.01 based on 45x forward earnings. House believes any short-term price weakness will be a good buying opportunity.
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