S$0.225-ASEN.SI
Asia Environment (a waste water treatment company) is the latest S-Chip to be privatized by its founders and major shareholders the Wang brothers (Wang CL is the Chairman while his brother Wang HC is the CEO).
The voluntary conditional offer being made will allow minority shareholders to either receive 30 cents cash a share or 1 new share in the offeror (a private company) for every existing share held.
The 30 cents cash offer values the company at S$155.24mln or 33.3% premium over its last traded price, 21-35% premium over its average price in the last 12 months and 27.7% premium over its IPO price of 23.5 cents in early 2005.
As the company had made a loss of Rmb29mln in the last 12 months, there is no meaningful trailing PE. Based on its shareholders equity of S$175.2mln, the privatization offer values it at about 0.9x and price to sales is 1.9x.
The founders and major shareholders together with Mr Yao, Atorka, Furui and Goka control 52.79% of the company and have given irrevocable undertakings to vote in favor of the offer and also to receive the share consideration in the private company.
The offer is conditional on more than 50% acceptances by the close of the offer.
While the company is allowing minority shareholders the chance to participate together with them in potentially obtaining a better valuation in another stock exchange, we believe the premium offered by their cash offer is also reasonable when compared with other S-Chip privatization offers (where the average premium to the last traded price is about 20%).
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