Friday, August 17, 2012
Zagro: The closest comparison would be China Animal Healthcare trading at 11.0x P/E. Zagro is approx at 7.0x P/E. Zagro is a relatively lliquid stock so do take note that prices may not hold if a large volume is done. The price of the offer itself is quite attractive given that it is close to the 08-09 lows at $0.15. The major sh/h (an individual Mr PBS, also the Chairman and CEO) will still own 30.6% of the co so mgmt is not expected to change. Furthermore, any shares not taken up will be acquired by Mr PBS. With current price at $0.245, the offer seems favourable given all the considerations. To play the devil's advocate, assuming the worst, that Skopini is trying to sell out, the price at $0.15 is close to the historical low... which doesn't seem very attractive for them.