Journey to Wealth
Glenealy Plantations - Shareholders Give The Thumbs-up
THE BUZZ
Samling's RM7.50 per share offer to privatise Glenealy was approved by the latter's
minority shareholders during a court-convened meeting yesterday.
OUR TAKE
Acceptance levels. 85.3% of total voting shareholders were in favour of the RM7.50 per share privatisation offer, while the remaining 14.7% were still dissatisfied with the tabled bid. It appears that the unhappy minority shareholders hold a smaller portion of the shares outstanding, however, as the 85.3% of total shareholders who voted 'yes' in combination represented 94.2% of the minority shares that voted. The disgruntled shareholders accounted for 5.8% of the minority shares voted, 4.2% of total minority shares and 2.0% of total outstanding shares. However, the figures suggest that there were 27.4% of minority shares that either was not present, did not have a proxy or chose to abstain from voting.
Valuations. Including the RM0.5275 per share special dividend declared on 11 Sept, the implied enhanced offer would value Glenealy's shares at 14.7x FY12 (the FY ended on June), 11.9x FY13 and 10.5x FY14 PEs. These are generally fair for a plantation company of its size and stock illiquidity. With the company's 30,693 ha of planted land in Borneo, the additional dividend on top of the existing offer price would place Glenealy's estates at USD9,250 per ha (RM28,570 per ha), which still represents a 22.9% discount to the recently transacted Indonesian brownfield land price of approximately USD12,000 per ha. We found the offer fair on a PER basis but still cheap on an EV per ha basis.
Adjusted FV. We reduce our FV from RM8.57 to RM8.10 following the acceptance of the privatisation offer, representing a 5.5% downward adjustment. Our FV of RM8.10 reflects the RM7.50 privatisation offer and outstanding net dividends of RM0.60 per share. RM0.0725 of the RM0.60 dividends will go ex on 19 Sept. With a mere 1.9% remaining to our FV, we downgrade Glenealy to NEUTRAL. The stock has given us a return of 56.8% since our initiation 16 months ago. We will cease coverage once the deal is complete.
Source: OSK
Samling's RM7.50 per share offer to privatise Glenealy was approved by the latter's
minority shareholders during a court-convened meeting yesterday.
OUR TAKE
Acceptance levels. 85.3% of total voting shareholders were in favour of the RM7.50 per share privatisation offer, while the remaining 14.7% were still dissatisfied with the tabled bid. It appears that the unhappy minority shareholders hold a smaller portion of the shares outstanding, however, as the 85.3% of total shareholders who voted 'yes' in combination represented 94.2% of the minority shares that voted. The disgruntled shareholders accounted for 5.8% of the minority shares voted, 4.2% of total minority shares and 2.0% of total outstanding shares. However, the figures suggest that there were 27.4% of minority shares that either was not present, did not have a proxy or chose to abstain from voting.
Valuations. Including the RM0.5275 per share special dividend declared on 11 Sept, the implied enhanced offer would value Glenealy's shares at 14.7x FY12 (the FY ended on June), 11.9x FY13 and 10.5x FY14 PEs. These are generally fair for a plantation company of its size and stock illiquidity. With the company's 30,693 ha of planted land in Borneo, the additional dividend on top of the existing offer price would place Glenealy's estates at USD9,250 per ha (RM28,570 per ha), which still represents a 22.9% discount to the recently transacted Indonesian brownfield land price of approximately USD12,000 per ha. We found the offer fair on a PER basis but still cheap on an EV per ha basis.
Adjusted FV. We reduce our FV from RM8.57 to RM8.10 following the acceptance of the privatisation offer, representing a 5.5% downward adjustment. Our FV of RM8.10 reflects the RM7.50 privatisation offer and outstanding net dividends of RM0.60 per share. RM0.0725 of the RM0.60 dividends will go ex on 19 Sept. With a mere 1.9% remaining to our FV, we downgrade Glenealy to NEUTRAL. The stock has given us a return of 56.8% since our initiation 16 months ago. We will cease coverage once the deal is complete.
Source: OSK
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