This  is report  is  a  RED  HERRING  ( Red herring (idiom), a deliberate attempt to divert attention; Red herring ... )

It is a waste of TiME  to listen to "Wonderers" and "Puzzlers",  whO  knOwn  nOthing abOut  the  strategies of the YZJ and BT and SCM  businesses, making  baseless  sweeping  statements.

# # # #

As a potential legal battle looms, market watchers are wondering why YZJ got its hands dirty in the first place.

'We're quite puzzled about what this acquisition can do for YZJ in terms of technology transfer,' an analyst with a local house told BT. 'Even if it has a 15 per cent stake, the controlling shareholder might not want to help them.'

# # # #

Legal battle looms as watchers puzzle over Yangzijiang's methods and objectives

 

By JOYCE HOOI

 

THE long arm of the law may soon be exercised as Sembcorp Marine moves to block the Yangzijiang Shipbuilding (YZJ) consortium's acquisition of PPL Holdings.

 

As a potential legal battle looms, market watchers are wondering why YZJ got its hands dirty in the first place.

While YZJ et al's bid for a 15 per cent stake in PPL Shipyard from Baker Technology heralded access to the yard's coveted jack-up rig technology, the possibility of the purchase going through is now very much in doubt.

Even if the US$155 million deal does materialise for YZJ and its Middle Eastern partners, they will have to contend with SembMarine owning the remaining 85 per cent of the shipyard.

Given SembMarine's determination to exercise its first right of refusal and keep the yard out of a competitor's hands, YZJ can expect to find a strange and irate bedfellow as its potential partner.

'We're quite puzzled about what this acquisition can do for YZJ in terms of technology transfer,' an analyst with a local house told BT. 'Even if it has a 15 per cent stake, the controlling shareholder might not want to help them.'

Perhaps that help might not be necessary, according to another analyst who did not want to be named. 'That 15 per cent stake comes with 100 per cent management control. It could be very favourable for YZJ, whether you like it or not,' he said.

According to him, Baker Technology retained management control of the shipyard even as it sold chunks to SembMarine over the years.

How this works exactly is conjecture at this point, but industry sources think YZJ could have achieved the same objective of rig technology transfer with a lot less hand-wringing all around if it had simply bought a stake in Baker Technology itself. In that case at least, there would have been two parties and not three, both of whom would be willing.

Also baffling and intriguing in equal measure are the legal machinations at work between the carefully worded lines of SembMarine's and Baker Technology's statements.

If anything, the exchange between the companies demonstrates how two parties can come to very different conclusions after reading the same document, which now appears to rival a secondary school's interpretive dance routine in terms of ambiguity. Over the past few weeks, SembMarine has made numerous allusions to its pre-emptive rights in the shipyard's articles of association and how it will 'take the necessary steps' to enforce them.

This brings to mind rather ominous pipe organ music, but Baker Technology appears to think little of it, relegating SembMarine's objection to the very last point in a six-page announcement, saying that its board had sought and received legal advice that SembMarine has no basis for its claims.

While one can only guess at whether there was a first right of refusal clause in the beginning, the lack of any mention of it in Baker Technology's statement almost certainly points to its existence.

There is room to speculate, however, on how specific the clause is. Sources suspect the main point of contention is the formula used in making an offer price acceptable to SembMarine and Baker. SembMarine's spurned offer of $59.4 million is paltry compared with the YZJ consortium's US$155 million bid.

With that in mind, some might argue that such an offer might not be deemed a proper exercise of SembMarine's rights, depending on how the first right of refusal clause was constructed, according to lawyers consulted by BT.

On the flip-side, SembMarine could well say that YZJ's offer - at three times the shipyard's consolidated net asset value of US$51.53 million, for just a 15 per cent stake - is absurdly high. Already, analysts such as OCBC's Low Pei Han have deemed YZJ's offer 'rather generous'.

Whatever is said by SembMarine or Baker Technology in the coming weeks, industry sources are certain that one party will have to squeal 'mea culpa' in court. As one source put it: 'It's now up to the lawyers.'

according to bakers and captains, no, but according to the oil rig giant, yes

think u need to send an email to the lawyers to verify liao

whO  is  the  Middle  East  bUyer ?

Looking at the Buyers profiles…..Wealthy Middle East Buyer and an Ambitious, Very Determined Yangzijiang Shipbuilding (Equivalent of our Sembcorp Marine)….

It’s a Done deal without any doubts, UNLESS Sembcorp Marine wants to have a Bidding War….. Then the price of Baker Tech would be even better…..Anyway, US $155M is only a paltry and small sum to these wealthy buyers looking at acquiring profitable oil & gas related assets in  line with their vision for synergy.   

Baker Tech is one of the best shares and undervalued shares to grab in this indiscriminate selling….. It is a highly profitable and high growth company (Profits for FY 2008 is $18M and FY 2009 shot up to $38M).

Remember Company is Cash Rich ($76M) and with the additional $214M from the sale of 15% PPL. Together ($76M + $214) total of $290M cash = $0.443 !! ….merely cash distribution per share (Total equity is only 654.7M) and valuation does not take into account of ….other high quality gas & oil related assets and vehicle axles business of more than 300 customers in many countries.

With total $290M cash, Baker Tech shall be a sparkling jewel.

Share valued at least more than 80 cts.  Perhaps company could reward investors….with some of the cash.