Olam

Re: Olam

Postby winston » Fri Feb 08, 2013 8:56 am

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Commodities firm Olam International said its net profit rose to S$154.1 million ($124 million) for the three months to Dec. 31, from S$128.5 million a year earlier.

After the attack by short-seller Muddy Waters LLC over Olam's aggressive spending and high debt, the company has begun a review of its business priorities and free cash flow targets.


Source: Reuters
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Re: Olam

Postby winston » Fri Apr 05, 2013 8:41 pm

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Olam Drops Defamation Lawsuit Against Carson Block
By Andrea Tan

Olam International Ltd. (OLAM), the commodity trader targeted by Carson Block, dropped its defamation lawsuit against the short-seller and his research firm Muddy Waters LLC, bowing to advice from shareholders to focus on its business.

“After considering feedback received from several of its shareholders, Olam has decided it should now move forward and focus resources and management attention to deliver value for its continuing shareholders and stakeholders,” the world’s second-largest rice trader said in a statement to the Singapore stock exchange today.

Olam said it hasn’t been able to serve the lawsuit filed in the Singapore High Court on Block. The company had sought unspecified damages, costs, and an injunction against republication of Block’s comments made at a hedge fund conference in London on Nov. 19.

http://www.businessweek.com/news/2013-0 ... rson-block
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Re: Olam

Postby iam802 » Tue Oct 08, 2013 1:27 am

Doesn't seems to be able to recover from its high back in June 2013.


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olam20131007.png
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Re: Olam

Postby behappyalways » Fri Nov 01, 2013 9:12 am

Muddy Waters: Game over for Olam if Temasek pulls out
http://www.businesstimes.com.sg/premium ... t-20131101
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Re: Olam

Postby iam802 » Fri Mar 14, 2014 10:32 am

Now, why would Temasek be involved in such deals?


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Temasek Unit Offers to Buy Olam in $4.2 Billion Cash Deal

http://www.businessweek.com/news/2014-0 ... -cash-deal

A Temasek Holdings Pte unit offered to buy Olam International Ltd. (OLAM) in a bid that values the commodity trader at S$5.3 billion ($4.2 billion), about 16 months after it helped stave off an attack by short-seller Carson Block.

Breedens Investments Pte is offering S$2.23 cash per share, the Singapore-based company said today in a statement, a 12 percent premium to Olam’s last closing price of S$1.995. It is also making an offer for Olam’s outstanding bonds and warrants.

Temasek, Singapore’s state-owned investment firm, became the largest investor in Olam, one of the world’s top three coffee and rice traders, after concerns raised by short-seller Block in November 2012 caused the stock to plummet. The offer has the support of Olam’s founding family and management, with some agreeing to sell a proportion of their shares to the bidding group.

“Temasek is already a large holder of Olam so they probably know the business better than everybody else,” said Robert Aspin, the Singapore-based head of equity investment strategy at Standard Chartered Plc. “The fact that they are willing to pay a premium is indicative of the value that they see in the underlying business.”

Olam has rallied 30 percent this year through March 12 in Singapore, compared with a 2.2 percent decline in the benchmark Straits Times Index. The stock, which closed as low as S$1.395 after Block’s attack, reached a near 17-month high of S$1.995 on March 12.

Group Support

Breedens also has an agreement with a group including Kewalram Singapore Ltd., Olam’s founding family shareholder, and 10 Olam executives including Chief Executive Officer Sunny Verghese to not tender their shares until six months after the offer closes, Breedens said in a statement. All totaled they hold 52.5 percent of Olam shares.

Kewalram and three members of key management have agreed to sell a 5.6 percent stake in Olam in acceptance of the offer.

Credit Suisse Group AG, DBS Group Holdings Ltd., and United Overseas Bank Ltd. advised Breedens.

Breedens doesn’t plan to make any major changes to Olam’s businesses or terminate employees. It also intends to keep Olam as a listed company, unless the minimum float requirements aren’t met, it said.

“We believe a successful offer will provide Olam with a stronger and more stable shareholder base to support Olam’s strategy and business model for the long term,” Breedens Director David Heng said in the statement. “We have invested in Olam over the years, and share a common investment philosophy to invest and build for the long term.”

Block’s Bet

Block said in November 2012 he was betting against Olam because he questioned the trader’s accounting methods and asset purchases, pushing the stock to a more than three-year low in December 2012. Olam rejected the assertions by Block and his research firm Muddy Waters LLC.

Block today declined to comment.

“Olam has been oversold following the issues raised by Muddy Waters and has bounced back strongly as the company addressed those concerns,” Alan Richardson, a Hong Kong-based money manager at Samsung Asset Management, said by phone before the announcement.

As well as adding Olam shares after the Block allegations, Temasek also backed a $750 million bond sale by the commodity trader. Olam said in December 2012 it planned to sell bonds and warrants to address any “lingering doubts” about its finances. The investment firm agreed at the time to buy any rights not taken up by other investors.

Olam is a supplier and processor of agricultural products and food ingredients across 16 platforms in 65 countries.

Temasek holds 24.6 percent of Olam through its units Breedens and Aranda Investments Pte, and the founding family has a 20.2 percent stake, according to today’s statement.

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Re: Olam

Postby behappyalways » Fri Mar 14, 2014 12:11 pm

looking at their latest cashflow and balance sheet.....

they have $3b loans due within a year and negative operating cashflow and less than $1b cash on hand......

by taking over the company, Temasek will also have to forgo the high interest.....


According to one analyst, the equity option attached to the bonds is worth another two to three percentage points of additional yield, putting the rate of return on Olam’s new bonds at 10%–11%. Michael Dee, a former Temasek executive, put it even higher at 13% in a commentary published in Singapore’s Business Times.

http://www.ifrasia.com/olam-pays-up-for ... 92.article


14-03-2014 12:40:59
BREAKINGVIEWS-Temasek buyout throws sovereign weight behind Olam


(The author is a Reuters Breakingviews columnist. The opinions expressed are his own) By Peter Thal Larsen HONG KONG, March 14 (Reuters Breakingviews) - Temasek is extending a protective arm around Olam . The Singapore state investor is leading a group which has offered to buy the 48 percent of the commodity trader it doesn't already own at a valuation of $4.3 billion. The buyout should help to shield Olam from sceptical short-sellers - and remove any doubts over its creditworthiness.

It's not the first time Temasek has come to Olam's aid. In December 2012, the group underwrote a $712 million convertible bond issue designed to see off short-sellers like Muddy Waters, which had challenged Olam's accounting. Yet despite Temasek's support, and a subsequent strategy overhaul designed to improve cash generation, Olam's valuation has lagged those of its listed peers.

For that reason, the consortium's S$2.23-a-share cash bid should find plenty of takers. The offer is only an 11.8 percent premium to Olam's most recent closing price, and comes after near-40 percent rally in recent months. But it's a price shareholders have not seen since the summer of 2012, when analysts started raising doubts about the company's soundness.

Besides, there's no prospect of a rival bid. The consortium says it wants to keep Olam as a listed company. But if it ends up with more than 90 percent of the shares, Singapore's stock exchange could cancel Olam's listing.

The most immediate beneficiary of the buyout is Olam's creditworthiness. Despite Temasek's minority shareholding, the company has faced persistent queries about its debt load. That's particularly damaging for a trading house like Olam, which relies on the confidence of its counterparties. In future, creditors will view Olam as an extension of its sovereign parent.

Short-sellers may insist that Olam would have been in trouble without Temasek's support. But that is precisely the point. By questioning Olam's accounting, Muddy Waters also challenged the authority of one of the world's largest investors. With assets of S$215 ($170) billion, Temasek's protective embrace is sufficient to fend off even the most determined attack. That's a lesson short-sellers will need to bear in mind when choosing future targets.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: www.breakingviews.com/TOPNewsSubscription ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> CONTEXT NEWS - A consortium led by Temasek on March 14 offered to take full control of Olam in a cash deal that values the commodities trading firm at $4.3 billion.

- Breedens Investments, a subsidiary of the government-owned Singaporean investor, is offering S$2.23 for each Olam share in cash. The consortium, which includes Olam's management and its founding family, already controls 52.4 percent of the company.

- The offer is an 11.8 percent premium to Olam's closing share price on March 12, and a 24.2 percent premium to the volume-weighted average price of the shares over the previous month.

- The consortium has offered to buy Olam bonds which are convertible into shares at a price of S$2.98 per share. It will also offer to buy 397.8 million warrants at a price of S$0.646 each.

- The consortium said its intention was to maintain Olam's listing, but that it might be required to de-list the shares if its stake rose above 90 percent.

- "Breedens wishes to increase its shareholding to support Olam's strategy and growth plans for the long term," it said in a statement.

- Breakingviews TV: Temasek tries to un-muddy Olam's waters: http://reut.rs/1noxoi4 - Temasek offer announcement (PDF): http://link.reuters.com/jyd67v - Reuters: Temasek unit offers to buy Singapore's Olam, values firm at $4.3 bln [ID:nL3N0MA605] - Reuters: Temasek's pivot to private investment heralds billion-dollar listed asset sales [ID:nL3N0LP1FI] - For previous columns by the author, Reuters customers can click on [LARSEN/] (editing by Andy Mukherjee and Katrina Hamlin) (([email protected])) ((Reuters messaging: [email protected])) Keywords: BREAKINGVIEWS TEMASEK OLAM
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Re: Olam

Postby iam802 » Fri Mar 14, 2014 2:06 pm

I think it raises more questions.

1. Forgoing high interest

2. Paying a premium given the loan due and the cash on hand.

3. Why buy now? Or even why buy the entire stake? Is Temasek (through such subsidiaries) in the business of running business?
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Re: Olam

Postby behappyalways » Fri Mar 14, 2014 2:44 pm

An old article.....maybe one can find the answer here....

http://bambooinnovator.com/2013/11/01/m ... pulls-out/
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Re: Olam

Postby behappyalways » Sat Mar 15, 2014 10:33 am

http://www.businesstimes.com.sg/premium ... 20140315-0

Published March 15, 2014
Temasek offer lifts Olam clear of Muddy Waters
Deal aimed at strengthening Olam's balance sheet is unusual for Temasek: analysts
By
andrea soh
[email protected]
print |email this article

BT 20140315 ASOLAM15 1001612


RAISING EYEBROWS
The deal is viewed by analysts as a positive for Olam but also raised questions on why Temasek might have chosen to take this route. - PHOTO: REUTERS

BT 20140315 ASOLAM15 1001612

IN a move seen as highly unusual, Temasek Holdings launched a cash offer for all Olam shares that it does not already own, leaving the market rife with speculation over why it did so.

Olam shares were clear gainers, and surged yesterday to the offer price of $2.23 after a trading halt was lifted at 11am. The stock closed at the same level, after shares worth $143 million changed hands.

The offer values Olam at $5.33 billion.

A Temasek unit, Breedens Investments Pte Ltd, is leading a consortium including Olam's management and its founding firm, to put up $2.53 billion to buy the rest of the commodity trader. The group already owns a combined stake of 52.5 per cent.

Temasek said it intends to keep Olam listed, but kept the option to reassess its position if the minimum public float requirement of 10 per cent was not met. The offer price of $2.23 - a premium of 11.8 per cent over the last traded price before the announcement, and 24.2 per cent over the one-month volume-weighted average price - exceeds the highest price in the past one year of $1.90, reached in May last year.

"This act shows that Temasek will back them to the hilt and shake out shorts (shortsellers) and doubters at the same time," said HSBC in a research note. The price offered is about 12 times forecast earnings for 2015, it added. "It's a good price, Temasek definitely (isn't) overpaying for the stock."

The deal is viewed as a positive for the agri-commodities trader, shoring up shareholder support ahead of its bonds which will mature in the coming years.

"Olam has long struggled to justify its balance sheet and growth plans etc as a public company, and this may help them run it their own way," said Nomura analyst Tanuj Shori.

Said UBS analysts James Stewart and Anubhav Gupta in a note: "We believe this long-term transition to positive free cash flow is likely supported by an unlisted investment market, where investors can take a longer-term view to company cash-flow growth."

Temasek took the same position in explaining the offer.

"We believe a successful offer will provide Olam with a stronger and more stable shareholder base to support Olam's strategy and business model for the long term," said Breedens director David Heng.

The deal, however, raised questions on why Temasek might have chosen to take this route.

For Michael Dee, a former senior managing director at Temasek, the deal "makes no sense". "Olam continues to cut capex which leaves it with fewer growth prospects and thus with less than what Temasek is paying. They continue to run negative cash flow, which must be funded with more debt, which makes the company more risky."

The move is also uncharacteristic of Temasek's usual investment approach. Moody's analyst Alan Greene said: "It tends to pick off stakes in a 10-15 per cent range where it could have more influence over management. (This time) it's gone far beyond the 10 to 20 per cent."

Getting full ownership of Olam might be necessary for the firm to succeed, he suggested.

"One thing we've learnt about commodity companies is that they are quite volatile, and their volatility feeds through to their share price and access to banks. If Olam is to be fully under Temasek's wings, it's not going to be exposed to equity volatility any more. It can fully focus on its business and trade commodities."

With the deal coming less than a month after Cofco Corp - the largest grain trader in China - bought a controlling stake in Dutch grain trader Nidera BV, and news of a possible joint venture brewing between Cofco and Noble Group, the possibility of a strategic motivation in ensuring food security also arose.

But while Olam is one of the top three rice traders in the world, the rice market is highly controlled by governments who would step in during food crises, said Rabobank food and agribusiness analyst Paul Chen. "(The reason for the deal) is company-specific. It will bolster their financial strength. It's not about food security."

Market observers were also puzzled over Temasek's stated preference to keep the stock listed. If Olam was taken private, it could raise funding on the strength of Temasek's AAA credit rating, they said.

But Mr Chen suggested that keeping the company public would also prove beneficial for Olam's financing needs. "Keeping a public float gives investors and lenders more comfort, including maintaining its currently high governance standards."

Olam's share price has failed to shake off the overhang of doubt since US shortselling firm Muddy Waters first launched an attack against it in November 2012. Then, Muddy Waters accused Olam of relying on accounting tricks to boost its bottom line, spending too much on poor-quality assets and having an overly high leverage.

Olam vehemently rebutted these charges. After three months of soul searching, it unveiled a new strategy in April last year to generate free cash flow more quickly, reduce its gearing and capital expenditure and to make it business less complex.

It is now on track to achieve positive free cash flow at the end of the current financial year, the firm said last month. The counter, however, is still heavily short sold, and is the second most "shorted" stock on the Straits Times Index, according to financial data provider Markit.

Borrowed stock accounted for 6.9 per cent of its total shares, though this has come down from a peak of 13.4 per cent on Nov 21, 2012. The surge in the share price could also be partly due to short covering, said Markit director Alex Borg. "It's likely that a short squeeze has happened in Olam with shortsellers caught out by the recent announcement, which prompted them to rush to cover positions and, in doing so, drive the share price higher."

The rare move by Temasek is reminiscent of its Neptune Orient Lines (NOL) episode a decade ago, when it offered to buy the rest of NOL that it did not own for $2.82 billion in cash, or $2.80 a share. This was then seen as a vote of confidence in NOL, which was suffering because its 1997 acquisition of US carrier APL coincided with a cyclical downturn, taking it into a sea of red ink. Just when it recovered, it was hit again by a cyclical downturn in 2001. Temasek now holds 67 per cent of the box carrier.
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Re: Olam

Postby behappyalways » Mon Mar 17, 2014 9:38 am

We take a serious view of all market misconduct in breach of the Securities and Futures Act, including potential insider trading and manipulation activities. We will spare no effort in conducting investigations on possible transgressions and will cooperate with regulatory agencies to enforce the law against offenders. We will continue to conduct robust real-time surveillance and work closely with statutory agencies to uphold a fair, orderly and transparent market.

SGX clarifies Olam International issue
http://infopub.sgx.com/FileOpen/2014031 ... eID=288729


First, I am intrigued that Temasek is paying a 12% premium after the stock has already increased 30% since the first of the year.

This means that Temasek is either paying nearly a 45% premium to what it could have paid just two months ago and is really slow to spot a value in its own portfolio or insiders were buying the stock in advance of a buy out offer they knew was coming. This 30% increase is even more abnormal considering the Straits Times (Index) is essentially flat for the year. Neither scenario is particularly attractive.


Temasek slow at spotting value & buying out Olam
http://www.tremeritus.com/2014/03/16/te ... -out-olam/
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