Here’s an update on what has happened since my post on the subject:
1. On 19 Dec, the offer documents were despatched to shareholders
2. On 26 Dec, SC Global’s IFA, PrimePartners Corporate Finance, released a statement to offer their opinion that the offer was fair and reasonable, being 15 – 20% discount to their calculated RNAV
3. On 30 Dec, Simon Cheong released a statement that he has no intention of raising the offer. As such, the Takeover Code forbids him from subsequently changing the offer.
4. In response to an analyst’s speculation that there may be a chance for the privatisation to go through with joint privatisation of Wheelock, the Board of SC Global released a statement affirming that there are no talks with Wheelock and that the Code forbids any such transaction.
Talk about throwing a spanner in the works! Well, now we know 2 things. The first is that $1.80 is the only game in town for now with no chance of increase. The second is that the privatisation will fail, assuming that Wheelock stick to their guns.
Anyway, due to Simon Cheong’s announcement over the weekend, the price plunged from $1.90 to $1.81 when the market opened on Monday. The price will probably stay around here for now, unless some other twist comes along.
By the way, I noticed that over the last few days, there have been quite a number of shares that have accepted the offer. As of 28 Dec, 549,762 shares have been transferred. With the price peaking at $2.08 and hovering around $1.90 at the end of 28 Dec, it’s a little puzzling to me why anyone would accept the offer since they could get a much better price selling in the market. I suppose there’s only 2 explanations for this. The first is that they are somehow related to Simon Cheong, so they are selling to him out of friendship. The second is that they believe that Simon Cheong would increase the price eventually and they would be eligible for the raised price anyway, so there’s no difference to them.
As a current shareholder, I kinda regret not selling at $2 but that ship has sailed. My strategy right now is to wait until the last minute to see if anything comes up. However, if Wheelock doesn’t counter with any moves, I will be disposing of my shares either in the market or to Simon Cheong. I do not recommend entering the shares now.
Disclaimer: I’m not a qualified financial advisor. All information and/or advice you may get from the post is at your own risk. I own shares of SC Global at a lower price point than the offer price.