SC Global

SC Global: Simon Cheong's cash offer at $1.80 comes at a 49.4% premium to the last close of $1.205, on the date just before the offer announcement. By any measure, this is a decent premium. The offer price also translates to a 15.4% premium over the latest NAV. Yet, investors may still be dissatisfied. Some analysts have estimated SC Global 's RNAV to be as high as $4.00, while Wheelock itself shares a similar view that the offer price still represents a discount of some 40-50% of RNAV. Key to note however, is that RNAV incorporates the surplus value from developments, assuming that they are sold. Investors have chased up SC Global's share price to above the $1.80 offer price, after observing that Wheelock, the second largest shareholder, has raised its stakes, spurring speculation that Simon Cheong would have to sweeten the deal further if he is serious about taking SC Global private. Yet market watchers may note that Wheelock's move to buy more SC Global shares reduces the counter's free float, and moves Simon Cheong closer toward his goal of taking the company private. Also, one cannot rule out the possibility of an eventual partnership between SC Global and Wheelock, to the exclusion of minority shareholders. If the deal falls through, SC Global remains a listed developer, and is subject to financial penalties on units unsold after the 2yrs post TOP. Maybank KE estimates SC Global will lose $71.7m in 2013 for its three projects at Hilltops, The Marq and Martin No. 38, if it does not receive a waiver or extension from the govt.