by winston » Wed Dec 17, 2008 4:10 pm
Not vested. From Lim & Tan:-
The possibility of Mr Wee Cho Yaw having to launch a mandatory takeover offer for Haw Par was discussed in the local media this morning. In early trading, Haw Par shares traded to a high of $3.72.
Mr Wee’s total interests, direct and deemed, crossed 30% (after buying 691,000 shares at $3.38) on Dec 5th, but announced on Dec 12th. Haw Par’s share price edged up 4 cents to $3.48 on Monday Dec 15th, trading between $3.44 - $3.50.)
COMMENTS
1. We would rule out a “generous†offer price in the event Mr Wee has to launch a general offer for Haw Par. (Whether he has to should be clear very soon.)
2. (It is however unclear if he has to do so. The “old hand†in investments should know better, unless
crossing the threshold intentionally. The patriarch is Non-Exec Chairman of both Haw Par and UOB, while sons Ee Cheong is CEO of UOB and Ee Lim of Haw Par.)
3. Firstly, look back to 2004 when UOB had offered to sell its stake in UOL to its shareholders (including
the Chairman and his family) at a price that was 17.7% cheaper than what UOL was then trading at.
UOL’s share price fell in response, which set the stage for Temasek to launch its bid.
4. Secondly, his latest purchase was his first in more than 2.5 years; and hence the purchase price would
be the minimum he has to offer. This represents a 60% drop from the 2007 peak of $8.39.
5. Finally, it is unclear if Temasek would still be a “white knightâ€, although someone else could well emerge
as one. (In May ’03, Oei Hong Leong emerged as a substantial shareholder of Haw Par with the purchase of 247,000 shares at $3.54 each; he ceased to be a substantial shareholder in Sept ’05 with the sale of 935,000 shares at >$5 each.)
6. Despite the above, fact remains Haw Par trades on 59% discount to latest NAV of $8.29, a good
proportion being its investment in UOB, valued at $835 mln. At $3.38, Haw Par’s market is $667 mln.
7. We have long maintained that:
- Haw Par was unlikely to sell its UOB shares;
- Mr Wee unlikely to privatize Haw Par, unless he could get it real cheap.
8. Note that in the event an offer is made, and “failsâ€, the Wees will be able to increase their stake in Haw
Par by 1% every 6 months.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"