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C&O Pharmaceutical
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stedeguy
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16-Sep-2011 22:32
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Got the circular in the mailbox today, a so-called independent advice from DMG on the merits of the offer. Might as well throw it into the dustbin as it is not worth the paper it is printed on. In it, DMG went on to confirm the few suspicions I had on the attractiveness, or lack thereof, of the offer and then deduce the exact opposite of what a rational person would. The few pointers I can think of are as follow: 1. < pg 26> It concludes that NTA-based valuation is not meaningful for a company which is not making drastic changes to its assets or businesses post offer and then in the next section (7.1.1) states that the Offer Price is 233.33% and 294.12% premium over NTA / share and Ex-Cash NTA / share. 2. < pg 29> A table shows that in the last 12 months the highest closing price is 0.53 with an average transacted price of 0.477. The Offer Price would represent a mind-boggling 4.82% premium. It also failed to explain what is in it for those who bought at or higher than the Offer Price? To subsidise Shinogi for its takeover? 3.< pg 34> In the valuation ratio, both the P/E and EV/EBITDA is below the mean and median of the reference companies. The only one ratio which is decent in comparison is the P/NTA which in pt 1, would render it useless. 4.< pg 35> Next, in comparing other delisting offers, the pattern is repeated. I also question why they include JK Yaming which is clearly a statistical abnormality. If you take it out, Shinogi's offer would look very very bad. So, for the life of me, I cannot understand how DMG can say " Having regard to the considerations set out in this letter, we are of the opinion ... the terms of the Offer are fair and reasonable from a financial point of view" . I rest my case, you be the judge.
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stedeguy
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09-Sep-2011 10:51
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The acceptance level (8% as at 6 Sep) since the 31 Aug offer seems to cast serious doubts  about whether  they will be able to reach the 95% mark. I read this as a signal that there are many who are adopting a " wait & see" attitude. Those who had the intention of cashing out would have  mostly done so by now. Of course, I am assuming that, the offer documents have  been despatched  to all affected shareholders (latest date is 14 Sep).  As I had earlier mentioned, I  would speculate that  even the offeror knows there is a likelihood that they will not succeed to take the co. private the first time round,  reflected in the fact that  the offer price is not final, leaving them with the option to revise the price (after testing water). Standing in their position, this move to suppress the price has its advantage as they had increased their stakeholding, faster than they would normally would, in open market purchase. They also set an artificial ceiling of 50c.    
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ivanignatius
Member |
05-Sep-2011 09:42
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The owner of this company paid shareholders (including himself) massive dividends in 2009, and then started to sell the company to the Japanese.   What does this tell you about the company?   My cynical interpretation is that it means that he couldn't find better ways to deploy his cash, so he paid it out, and then sold the company.   Since he knows a lot more about the company than you do, I wouldn't stick around. | ||||
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alooloo
Veteran |
02-Sep-2011 10:37
Yells: "I am not young enough to know everything. " |
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I got the letter... if you don't take, you will continue to be the owner of the share... unless they able to accumulate more than 90% or 95% of share, then they can force you to sell.  I still haven't make up my mind to sell or hold it. Any tips?  
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kc0257
Member |
01-Sep-2011 22:57
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Has anyone got the letter?    What happens if I dun take this offer.... Pls advise  |
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stedeguy
Member |
17-Aug-2011 17:28
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Just realised that Nomura in a separate announcement, posted a Compulsory Acquisition Notice to " dissenting" shareholders for Portex Int. That will be an accurate description of me... | ||||
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stedeguy
Member |
17-Aug-2011 16:55
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Most prob, Shinogi or their agents. Think the other concerted parties, like Mr.  Gao and Sumitomo took undertakings not to do anything to  their holdings. Like I maintained before, I am not going to be swayed by these noises.  This deal is very fishy IMO. I particularly  don't like the clause which says, if there are future dividends declared, the  offer price will be  nett of that.  In any case, the  bottom price is already fixed at $0.50, it will do  me no harm to wait & see, since I don't have the need to cash out now. 
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RachelG
Member |
17-Aug-2011 16:43
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?? someone purchase C & O pharma at 0.500.. ?? wierd | ||||
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alooloo
Veteran |
17-Aug-2011 15:43
Yells: "I am not young enough to know everything. " |
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Thank, How is it going to happen? How the transaction will take place? Is it automatically after you sign the offer letter? |
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francisd
Veteran |
17-Aug-2011 15:35
Yells: "BUY LOW SELL HIGH" |
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Looks like no choice but to give it up.  Have to wait and see since the offer is now " unconditional" @ .50cents.   |
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alooloo
Veteran |
17-Aug-2011 14:18
Yells: "I am not young enough to know everything. " |
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Anyone thought on this... accept or don't accept ....    Many terms inside this document, is beyond my understanding...   http://changao.listedcompany.com/newsroom/20110817_115920_E92_DFCB27D5B84F1678482578EF00150FF4.1.pdf   |
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timqoo
Senior |
11-Aug-2011 16:02
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maybe this counter is the safer one? in this yo yo market. | ||||
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gregorsamsa
Member |
05-Aug-2011 07:40
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Just a thought. Why 50 cents? This is the buy in price of Sumitomo's 30% stake.If Shionogi prices there offer at say 60 cents, Sumitomo might be tempted to sell and Shionogi's shareholders might ask, why pay so much when someone else paid 10 cents per share less the other time? I share the feeling too that the privatization deal might not materialize as they are still quite far off from getting 90-95%. I understand too that if you do not accept their 50 cents offer, and that Shionogi does get the 95% of shares, your shares will be taken from you at 50 cents as per the notice. Correct me if I am wrong. http://sgxstockpicker.blogspot.com/ |
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susan66
Master |
02-Aug-2011 12:02
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I take profit first, no choice due for contra. Quite good profit  already. | ||||
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Fairygal
Veteran |
02-Aug-2011 11:34
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过 河 拆 桥 ! | ||||
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hotokee
Veteran |
02-Aug-2011 09:05
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Traded below 50 cents offer price this morning opening..  Though many would not like the offer price of 50 cents, it goes without saying that one can make some 4+ percent if one buys at 48cents and surrender the shares at 50 cents. | ||||
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stedeguy
Member |
01-Aug-2011 15:07
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Looking at the outstanding shares of 41.83%, it is quite possible that they may not be able to reach their required 95% (according to Bermuda Companie's Act) to take it private, when the street consensus is that  the offer is unattractive. If they have been sincere in their offer, they would have placed a much higher premium to secure the buy-in asap before other interested parties come into the scene. Looking at previous standoff for UIC, http://takeoveruic.blogspot.com/2010/12/what-will-be-next-takeover-price-offer.html, it is not unconceivable that the deal will fizzle out. |
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hotokee
Veteran |
01-Aug-2011 14:33
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The last round of takeover affecting my portfolio, was Passion which was offerred at 26 cents when the counter was barely 3 years on the exchange.  I also have to " Lan2" take the money and pissed off without recourse to anything except surrender to all these unfavourable deed to our investments. Lost to many like, CKTang, Sp Courts, SPC, and many others.  All traded to very cheap due to some of the less credible reporting " loss" before shouting " time (opportunity) for us to privatize!"
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hotokee
Veteran |
01-Aug-2011 14:27
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Can we really opt out and refuse to accept the offer because it is dirt cheap? What is the likely scenario that will result if minority shareholders reject the offer?  I think we have no power to decide because everyone is always for himself and not for the general good of all.
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stedeguy
Member |
01-Aug-2011 13:22
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Considering the fact that procuring C& O will immediately give entry into a previously uncharted territory and the world's most populous country at that, it is obvious that Shionogi is attempting to pull a fast one, to try and hoodwink small-time investors like us to sell to them at a cheap. The so called 11% " premium" over last traded price  is no where near recent takeovers which  saw upwards of 40%.  They even try to justify it by saying its a 260% premium over closing price as at 30 Dec 2008!!! Why don't they compare with 61c seen in 2007 instead? What is puzzling is that Sumitomo is in the deal, and they will not gain a single cent from their purchase. This sounds fishy and I suspect there is an agreement to artificially suppress the price, get the buy-in,  delist the company and then privately compensate their " loss" . There is a silver lining as there is no proviso to say that 50c is the final offer and that it will not be increased, unlike other unconditional offers before. I will reject this ridiculous offer and hopefully, this will spur other competitors to come in and make counter offers. |
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