Friday, December 28, 2012

SC Global

SC Global: to recap, Simon Cheong has made a voluntary unconditional cash offer for all SC Global shares he does not own, at $1.80/sh. The offer closes 5.30pm, 16 Jan 2013 or at such later date as may be announced. At latest update, Simon Cheong holds a 60.84% deemed interest in the co. Valid acceptances received to date are negligible, amounting to only 416k shares, or ~0.1% of shares in issue. After news of the offer, second largest sh/h Wheelock bought over 1m SC Global shares at ~$1.81, taking its stake to just above 16%, commenting that the share price of SC Global represented a discount of 40-50% of its estimated RNAV. Shares of SC Global have since continued to trade above the $1.80 offer price, with traders anticipating a higher offer price to come, even after the independent directors commented that the offer is “fair and reasonable”. SC Global’s NAV stands at $1.56 as at 30 Sep 2012. Meanwhile, among analysts in Singapore, the range of targets for SC Global’s RNAV is between $3 - $4. Maybank KE has noted that previous such deals were carried out at 30-40% discount to RNAV, which would translate to an offer price of as much as $2.50/sh or as little as $2.10. From the individual shareholder’s perspective, if the 90% breach doesn’t occur, nothing happens if he doesn’t take up the offer. He will continue to hold his SC Global shares. SC Global, on the other hand, as a company, has reason to privatize itself. As a listed company, it is considered a foreign developer, and may face financial penalties totaling up to an estimated $71.7m in 2013 , for its unsold units beyond the two year grace period post TOP.

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