Saturday, June 13, 2020

Perennial privatize at $0.95

Perennial had released an annoucement on 12 Jun that they are going to privatize at $0.95 (Link).

I believe this will go through successfully given that the 4 major shareholders already own 82.4% (SGX required 90% to privatize).

Million dollar question is should existing shareholders vote YES or NO to this privatisation? 

At $0.95 offer price, this is only PB 0.6  (As of 31 Dec 2019 NAV $1.584).
From this angle, shareholders seem to be getting lowball offer.

Firstly: NAV should be higher now given the disposal completion of 30% stake in 111 Somerset and the most recent news of the disposal of AXA Tower occuring in 2020.

Secondly: More and more of their China HSR (High Speed Rail) projects will TOP over the next few years.

However, if there is no privatisation rumours (which result in the share price run up from around 45 cents to current 69 cents before trading halt), I believe the share price range will be around 40 cents max today.

Seeing the PB and dividend declare keep going downward, I also had lost my patience and partial sold my Perennial at a loss on 22 Apr at $0.43 (Link).
Well, I do not have the crystal ball and I still feel my sell decision made is correct at that point of time.

 Although this seem to be a lowball offer for shareholders (especially those who held this stocks for many years), I feel it is still a WIN WIN for both shareholders and the sponsors.

Shareholders finally can unlock their investment in current bear cycle and recycle their capital into another investment which will reap higher % returns in 1-3years timeframe (good quality stocks should rebounce faster than Perennial [Hint: HongKongLand (link) / STI ETF).

Quote from my Mar 2019 blog "I hope i am right to spot this hidden gem evolve to become a diamond ring in the next 3-5years time."

Related post:
3) Added: PERENNIAL (Mar 2019)

No comments:

Post a Comment