Practice Makes Perfect
Sell MAHSING Buy MAHSING-OR?!
Chin Kok Tan
Publish date: Fri, 01 Mar 2013, 11:57 PM
Chin Kok Tan
0 240
Welcome to CK's Mergers & Acquisitions Theme Park - The BEST Has Yet to Come!
MAHSING
Proposed Rights Share with Warrants:
-
One (1) rights share for every three (3) existing MAHSING share.
-
Three (3) free warrants for every five (5) rights share subscribed.
Assumptions:
-
You are a long-term shareholder of MAHSING who own MAHSING shares as at
25/2/2013 rights share entitlement date.
-
You will subscribe to the MAHSING rights share that you are entitled.
-
You are currently holding 15,000 units of MAHSING. Hence, you are entitled to
subscribe 5,000 rights shares at issue price of RM1.42 per share. At the same
time, you will be rewarded with 3,000 units of free MAHSING warrant.
This is a sample of the current MAHSING and MAHSING-OR market prices (closing prices @ 28/2/13):
CASE 1 >> Most of the MAHSING shareholders will do the following:
1) Subscribe 5,000 rights shares at RM1.42 per shares.
2) Get 3,000 units of free MAHSING warrants shares.
3) At the end of the deal, your portfolio will have:
a. 15,000 + 5,000 = 20,000 units of MAHSING.
b. 3,000
units of MAHSING Warrant.
CASE 2>> If you are aware about the
undervalued of the listed MAHSING-OR, you will probably do the following:
1) Subscribe 5,000 rights shares at RM1.42 per shares. (same as above case)
2) Get 3,000 units of free MAHSING warrant shares. (same as above case)
3) SELL your existing 15,000 units of MAHSING @ around RM2.05-2.10. (先舍弃)
4) Immediately BUY back 15,000 units of MAHSING-OR @ around RM0.64-0.68.
5) Pay RM1.42 per shares to subscribe these 15,000 units of rights.
6) For GOD sake, you get additional 9,000 units of free MAHSING warrant
shares.
7) At the end of the deal, your portfolio will have:
a. 5,000 + 15,000 = 20,000 units of MAHSING. (从新获得)
b. 3,000 + 9,000 = 12,000 units of MAHSING Warrants (Har? WTF???抵到烂!)
Conclusion>> "舍得舍得，不舍不得，有舍才有得，要得就要舍"!!!
In
both cases, the holding of MAHSING shares will be the same, but you got
additional 9,000 units of MAHSING warrant shares, which I personal think that this warrant will hit upper limit price of RM0.305 during first day of listing, and hit
RM0.40-0.50 in the second day.
How
often can we see this kind of golden opportunity in share market? I think the
chance to see this kind of similar case is quite rare, rarely happen once a
year. Most of the time, the value of free warrant will be taking into account
when rights shares commence its trading in market.
So,
in this deal, the chances are given and it has been last for few trading days.
Next Monday will be the last chance. Opportunity was
present, why not just grab it and has a go!
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I'm
obliged to inform you that I'm holding some MAHSING-OR shares @ RM0.60, bought
at market in its first trading day, but sold all today @ RM0.68. Since I'm not
holding any MAHSING shares during entitlement date, so I cannot make any profit
from this deal. Purely analyzing it for fun and as part of the learning process.
The
comments & case studies written above are just for sharing purpose. I'm not
responsible for your profit or loss.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
iska
Yes, i have the same analysis too, and that's what I did. But do u know is the new shares subscribed from the rights are entitled to the 7.6 ct dividend. If not, then, will it mean it is of a different value compared to holding on to exisiting Mah Sing mother share.
I also find the bonus shares interesting, as the new shares and warrants alloted from the rights subscription are also entitled to the 1-for-5 bonus issue. Also, the warrant exercise price will be adjusted to $1.98, post-bonus. This makes it more attractive. Shd warrant price trade at 30ct, that will mean a total payout of $2.28 to buy a mother share, vs ex-bonus price of $1.75 (assuming last day closing price of $2.10 for the mother, prior to ex-bonus date), ie, a premium of 30%, which is fair given a gearing then of about 5.8X.
2013-03-02 07:58