Wednesday, June 24, 2020
Wednesday, June 17, 2020
Tuesday, June 16, 2020
Sunday, June 14, 2020
The IPO (Initial Public Offering) of Perennial China Retail Trust (PCRT) was carried out in 2011; the IPO price was S$0.70.
PCRT paid a total dividend of S$0.1286 from the year 2012 to year 2014,
0.0475 + 0.0386 + 0.0425 = 0.1286
So, after deducting the total dividend received, the cost of investment of a PCRT unitholder would be S$0.5714 per unit,
0.70 - 0.1286 = 0.5714
In 2014, Perennial Real Estate Holdings Limited (PREHL) made an offer to buy all the PCRT units it did not already own at S$0.70, and the consideration of the offer was the issue of PREHL shares at the price of S$1.3353 per share,
And, on 12 June 2020, the Consortium led by PREHL's CEO, Mr Pua Seck Guan, is trying to to take PREHL private by making a voluntary cash offer of S$0.95 a share for all the PREHL shares that it did not already own.
At S$0.95 a share, the Consortium is effectively trying to buy (back) the PCRT units at S$0.498,
0.95 / 1.3353 * 0.70 = 0.498
Hence, for the investing public who held the PCRT units since its IPO in the year 2011, each unitholder would have suffered a LOSS of S$0.0734 per unit,
0.5714 - 0.498 = 0.0734
Where is the TOTAL RETURN, i.e., Capital Appreciation plus Dividend Income, that Mr Pua Seck Guan is so proud of ?!?
Saturday, June 13, 2020
Tuesday, June 09, 2020
Saturday, June 06, 2020
Monday, May 25, 2020
It was recently announced by PREHL that, certain of its substantial shareholders are reviewing the options in relation to their holdings in the Company.
So, is this an indication that PREHL will be privatized?
Guessing from the privatization of OSIM by one of PRHEL's sponsors and Vice Chairman, Mr Ron Sim, and the recent privatization of Breadtalk by Mr George Quek--one of the trusted business partners of PREHL's CEO Mr Pua Seck Guan, I am saying that PREHL is HIGHLY LIKELY to be privatized.
The REDEMPTION OF S$280 MILLION 4.55 PER CENT. BONDS DUE 2020 (THE “BONDS”) is further proof that PREHL is highly likely to be privatized. By borrowing S$250 million from the banks to redeemp the bond issue, it is telling me that PREHL finds it cheaper to borrow from the banks instead of raising funds from the market and hence the need for PREHL to remain a listed entity.
So, at what price will PREHL be privatized?
First of all, the MINIMUN price for privatization is S$0.8808 or the price at which Mr Kuok Khoon Hong, Chairman of PREHL, through Wilmar, bought the PREHL shares from his good friend Mr Martua Sitorus in 2017.
The highest price at which Mr Kuok Khoon Hong has ever bought the PREHL shares from the open market is S$1.045. And, Mr Ron Sim paid the highest price of S$1.109 when making open market pruchases of the PREHL shares.
There is no doubt in my mind that borrowing money from the banks will get cheaper given that Central Banks around the world are continuing to print money. And, it is also reasonable to assume that PREHL will be able to secure higher valuations if it were to list in Hong Kong or China.
And, if a privatization exercise were to be carried out for PREHL, I strongly belive that the substantial shearholders concerned will want to ensure that the privatization is a success. I therefore belive that the Offer Price for PREHL has to be higher than S$1.109--the highest price paid by Mr Ron Sim when he purchased the PREHL shares from the market.