S$0.139-WANX.SI
The major shareholders of WanXiang an S-Chip (that manufactures flavors and fragrances) is proposing to privatize the company via a voluntary delisting at 20 cents a share or 43.9% above its last traded price of 13.9 cents, but below its July ’07 IPO price of 29 cents and way off its all time high of 60.5 cents hit shortly after its IPO on 23 July ’07 (its all time low was 3.5 cents in Dec ’08).
The major shareholders together with their concert parties have received irrevocable undertakings of 67.15% of the outstanding shares to vote in favor of the delisting proposal.
The major shareholders need at least another 7.85% of minority shareholders to vote in favor of the offer as well as not more than 10% to object to the delisting proposal before the deal can pass.
At 20 cents, the company would be valued at S$63mln, trailing PE is 6.3x, price to sales is 0.5x and price to book is 1.2x.
While the privatization valuations are off its IPO levels (9x PE then), the widespread dis-trust of SChips given the numerous frauds and trading suspensions suggest that Wanxiang’s major shareholders will likely succeed given that there is no known institutional shareholder who owns more than 5% of the company who could potentially block the deal.
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