UEMWorld = UEMLand
- UEMWorld is being dissected into its property and non-property assets -- (refer to the blog entry yesterday)
- The corporate restructuring will eventually see UEMWorld getting delisted as the business takes a more focused direction (less diversified)
- The exercise will see layers of UEMWorld getting eliminated (other non-property businesses), and this will leave its major shareholders and other minorities who accept the proposal to have a direct access and exposure in its UEMLand (UEMWorld's share-price driver)
- UEMLand is scheduled to be listed this September
- Upon listing, it can be safely assumed that UEMLand share price will be lower than the pre-suspension closing price of UEMWorld (RM4.12)
- Current valuation of UEMWorld is based on analysts valuation of UEMWorld's land of slightly below RM20psf and the market price of its current listed subsidiries (OPUS, CIMA, Pharmaniaga, UEMBuilder)
- Apart from the capital repayment which will see investors receiving RM124.82 per every 100 UEMWorld shares and 125 UEMLand shares, plus the option to buy a basket of OPUS, CIMA, Pharmaniaga, UEMBuilder shares at a premium, UEMWorld shareholders can also enjoy the upside of Newco (UEMLand)
- The risk? Slow progress on land sales and news flow on the development of IDR!
- To recap, UEMLand is the master developer of the IDR (a special economic zone in the southern state of Johor)
- Primus Pacific Partners pay a hefty RM9.55 a share, a near 60% premium on its trading price
- The EDGE's Gunasegaram asks, why is it that other shareholders don't get to participate in the largesse
- On paper, Primus claims that it does not gain management control, but judging by what we read so far, they seem to be dictating the news flow and making its own announcement which it should rightly be coming from the board of EONCap
- Gunasegaram argues that if it pays 60% premium , it must have some amount of confidence that it will have at least some of its ways with EON Bank
- When probed, Nieukwoop (MD of Primus) said that Primus shareholders include Middle Eastern investors and some Asian families. The fund is set up in 2005, and invest primarily in financial services companies.
- The EONCap is Primus' second investment after New China Life.
- Gunasegaram went on to say that permitting some shareholders to benefit and exit from a listed company with a high price without the same benefit to all other shareholders is inherently unfair and smacks of insider dealings
- Note: He made an excellent point, if Bursa wants to attract investors and breed market confidence, they need to change certain market practices, and need to make these changes transparently. Market perception is as significant as market actualities. Even if the Primus-EONCap deal was an honest and done on a willing buyer-willing seller basis, it should do enough also to address any suspicion of unfair practices. Failure or delay to do so can harm investors', especially minorities', confidence.
- Astro's shares had gained 18% since Jan 25, after announcing a change in CEO.
- Market speculation is rife that new investors will take a minority stake in Astro Malaysia and a majority stake in its cash-draining Indonesian operation
- (EDGE said the new investors possibly from come from Middle East. These days when a rumour is about a new foreign investors, we all automatically think of Middle Eastern investors, don't we?)
- Another rumour is privatisation and a reverse take-over by Ananda Krishnan's MEASAT.
- Astro has denied at least twice in the last eight months a proposal to take itself private, but no recent announcement or denial has been made - they may take market by surprise again just like the MAXIS' privatisation
- But some argued that Astro is unlike MAXIS, as ASTRO only offers a 2% yield at current levels and is 21.4% owned by Khazanah which does not sell its equity cheaply
- But for ASTRO share punters, do prepare for a share price retreat if nothing happens!
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