by winston » Mon Dec 22, 2008 9:17 pm
Not vested. From Kim Eng:-
Haw Par Corp – Company update (Gregory YAP 64321450)
Previous day closing price: $3.80
Recommendation: NOT RATED
Did Wee Cho Yaw cross the 30% threshold?
It was reported in the papers last week that Wee Cho Yaw had acquired more than 30% of Haw Par’s shares, which should have triggered a general offer. On 5 Dec, Wee bought 691,000 shares at $3.38, taking his deemed interest from 58.3m shares to 59m shares. Based on the 197.7m shares outstanding and 1m shares directly held, it appeared that he had increased his holdings from slightly under 30% to 30.3%.
He did not
We believe a GO is not forthcoming based on this assumption, as Wee & his concerted parties already owned more than 30% of Haw Par prior to the 5 Dec transaction. In addition to his deemed interests, he and his three sons, definitely concerted parties, also own 1.5m shares directly. In total therefore, Wee actually owned 30.3% before the 5 Dec purchase. Since then, Wee has bought another 62,000 shares. However, as long as he does not buy more than 1% (~2m shares) every six months, he does not have to launch any offer.
Bulk of Wee family stake in four investment companies
As of the latest, four investment companies hold Wee’s personal interests of 59.1m shares (29.9%) - Wee Investments with 43.9m shares or 22.2%, Supreme Island with 11m shares or 5.6%, Kheng Leong at an estimated 2.7m shares (1.4%) and CY Wee & Co (1.5m shares). Wee and his sons own another 1.5m shares directly, thus taking the Wee family’s total personal interests of 60.6m shares or 30.6%.
Three other institutional shareholders
Other major shareholders in Haw Par include UOB with 19.7m or 10%, as well as two major institutions – Arnhold & Bleichroeder Advisors and Mackenzie Cundill Investments – with another 25% or 49.5m shares.
Nevertheless, deep value in Haw Par
Regardless of whether Wee actually takes over Haw Par, we reckon the stock is deeply undervalued. Its main asset is investment portfolio (mainly shares in UOB, UIC and UOL), which we estimate to be worth $1.1b ($5.36/sh) at today’s prices. Its UOB shares alone are worth $4.50 per Haw Par share.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"