Partial offer by management. It was just announced that the Chairman of Wing Tai, Mr Cheng Wai Keung (through vehicle Ascend Capital) is launching a voluntary conditional cash partial offer to acquire 15% of the outstanding shares of Wing Tai not currently owned by the Cheng family or treasury shares, which translates to c.8.7% of Wing Tai’s share base. The offer price of the partial offer is S$1.39 per share, representing a premium of c.18.3% over the last closing price of S$1.175 before the trading halt. The controlling shareholders would own c.50.6% of Wing Tai subsequent to likely full take-up of the partial offer.

Corporate signalling. While the rationale of the partial offer stated in the offer documents articulate management motivations to gain statutory control of the company, we note that management have been acquiring shares of Wing Tai of late (c.8.5m shares acquired in June 10 in the price range of S$1.52-S$1.62) as well as 975,000 shares acquired in Sept 11 recently at an average price of S$1.366). We believe the management is of the view that the share price is currently under-valued, trading at 0.51*x P/B and is signalling to the market of this view. Management is not likely to seek a delisting or privatisation of the company moving forward.

Near term strength expected, but maintain NEUTRAL. While the share price performance may remain firm in the near term attributed to the partial offer, we are maintaining our TPS$1.16 based on 50% discount to RNAV. This is in view of the gradual moderation in private residential prices moving forward, 41% GAV exposure to the high-end segment in which we are less sanguine, as well as rising policy risks in which sustained share pricing re-rating is unlikely moving forward. However we see limited downside for the stock trading at 0.51*x P/B and 0.55*x P/RNAV. Maintain NEUTRAL.

Net asset value per ordinary share based on issued share capital excluding treasury

shares (S$) 2.51as at 31-03-2012.

So partial offer at $1.39 is not attractive to shareholders.

So partial offer at $1.39 is not attractive to shareholders.2.51as at 31-03-2012.

 

 

 Ascend Capital Limited (the " Offeror" ) intends to acquire 15.0% of the issued shares (" Shares" ) in Wing Tai Holdings Limited (the " Company" ), other than the Shares held in treasury and those already owned, controlled or agreed to be acquired by the Offeror and the Cheng Brothers (the " Partial Offer" )

 The Partial Offer is NOT a privatisation exercise and the Company’s listing status on the SGX-ST will be maintained

 The offer price of S$1.39 per Share (" Offer Price" ) represents a premium of

o 18.3% over S$1.175, being the last transacted price quoted on the last trading day prior to the date of announcement of the Partial Offer (the " Offer Announcement Date" ) (the " Last Trading Day" ), and

o 14.3%, 9.6% and 21.5% over the volume weighted average price (" VWAP" ) for the one-month, three-month and six-month periods, respectively, up to and including the Last Trading Day