SP0094701, much as I would like to join you in your optimism and confidence, I am not too sure OSK will climb up. During this time of "red numbers", buyers are a bit more careful. Maybe the free warrants and special dividend may help a bit; but buying shares from the Boss just does not excite me. Europe is down and USA is also trending downwards. VERY WRONG TIMING.
Worth noting is that OSK Holdings is also proposing a bonus issue of up to 237.74 million warrants to the existing shareholders on the basis of one free warrant for every four existing shares held.
It also proposed to pay a special cash dividend of 15 sen apiece.
Looking at how the deal is structured, it shows the final target of Ong is to control OSK (RHB stake is the main jewel), with OSKprop as a bonus. It is absurd to offer lower than market price while MOSK can offer at higher price. Certainly the shareholder of OSKprop and PJdev will reject and pjdev deal will likely fail. As for OSKprop, it has not been mentioned about privatization, but for a privatization to go through they need get 90% acceptance. With the great prospect in Sg Petani project, Elevia Residence, and recurring income from Atria Mall opening in 2015., OSKProp shall not accept offer. To make it worse, OSK offer bonus warrant and 15 cent dividend to current shareholders, not after the deal, in order to entice OSK shareholder to accept the proposal and enriching himself. Ong is also very cunning not to table the OSK deal before PJDev and OSKprop AGM. Otherwise he will be in hot soup during AGM.
Wonder why he would accept a lower price eventhough he can demand OSK to give more shares? Rather than allowing share base to be bloated and dilutive, he would rather keep it small for easy privatization o OSK later.
Thank u 4 reading. Don't confuse issue and market price of a share. The issue price of Osk holding share at present is 1 ringgit. New Osk holding share is issued at 2. Ong will have to give u Rhb/new entity share or sale proceed from Rhb/new entity share to back up the value of Osk holding. Ong is telling u Osk hold. is worth more than 2 ringgit. Ong may have strucked a deal to hive off Rhb. Have to convince PJD majority and Osk prop minority shareholders that Osk hold is worth more than 2 ringgit for the takeover to be successful. As for Osk prop, he is more or less paying himself. I don't think he will pay himself less than the market value or NTA value. Aabar wanted 12 for Rhb. Ong can say to Aabar if u think Rhb is worth 12, I will sell Rhb to u for 11 or 11.50 or even 12. Ong can then use this to back up the valuation of Osk hold. Otherwise no deal, forget it. I think PJD took a loan from Osk capital to finance the project in Australia.
I have assumed old Osk holding ordinary share of 1.00 ringgit was issued at par value of 1.00 ringgit. But the market value yesterday was 2.08. Where is the money coming from for the takeover? Ong is encouraging PJD and Osk prop shareholders to take up share offer instead of cash as Osk holding is still worth more than 2 ringgit after the takeover.
My best guess, OLH is trying to secure listing status of OSK upon merger of CIMB-RHBCap-MBSB instead of trying to distributes RHB shares to shareholders while grouping his property assets under one roof. So, instead of giving out at least RM 2.00 from RHB, he prefers keeping most and just hands out some warrants (which you will give him money in future) and RM 0.15 special dividend.
It is a carnage; it is brutal for OLH group of companies. OSK - 2.07; OSKP - 1.99; PJD - 1.60 and it is even worse for the warrants of OSKP and PJD. OLH had acquired most of the shares very cheap and he makes good value for his shares even if he sells them at a discount (to himself). Now what happens if he sells RHB shares? And he gives us only 15 sen per share. WAH! this is clever (to put mildly). When everything settles down and the market regains her composure OLH will grin all the way to the bank.
Billy, coz OLH only want to use RM2 to buy OSKP and RM1.60 to buy PJD or share exchange, that's why it drop so jialat.... after the acquisition OSK is just RM2.00 from the way it exchange OSKP to OSK..haha..so buy OSK below 2.00
Oo la ha. OLH is a happy man. He has got the minority shareholders where he wanted and the current economic situation helps him a lot. I had written earlier this is a bad time to merge. I was right - a bad time for us. I was wrong - a right time for the grand master. All the figures are too big for me to understand. How much would OLH's share in the enlarged OSK be? More than 50%? What would be the nett asset value of enlarged OSK be?
Well, is that possible that he actually want to sell everything to RHB as a package? If you want to marry my younger daughter, you must marry my elder daughter too.
Hanting999, ong's share in Osk will be around 44% if I am not wrong, assuming the rest of them will convert to Osh hold shares as well. Ong + PAC have applied for exemption to undertake a mandatory takeover offer for the remaining Osk shares under practice code 9 Take o + Merger, in case ong + co hold more than 50%. This can happen when the rest of the shareholders want cash. NTA of combine Osk will be below NTA, Osk $2 but NTA 2.75 , PJD $1.60 but NTA 2.54 and surprise,surprise Osk prop $2 - NTA 1.87. Correct me if I am wrong.
Osk prop will be a subsidiary company of Osk hold. Year end financial result will be consolidated into Osk hold even if the rest do not want Osk hold to take over as ong and pac will sell 73.6%. Only need to account for minority interest in financial statement. As for PJD, it will be an associate company. Share of profit will be taken into account in Osk hold.
The most likely result is only ong and pac will covert their shares to Osk holding. Ong holding in Osk hold will be about 55%. Osk prop will be a subsidiary and Y/E consolidation will be done. Pjd will be an associate co. and share of holding taken in bal. sheet and share of profit taken in P/L a/c. The point is, eps will increase as there is a 30% increase in new shares but profit will increase by more than 50% next year. Osk hold. market value is 2.80 . Osk prop. market value is also 2.80. Now both value at 2.00 therefore ong will not lose out. Osk nta is 1.87 but takenover at 2. Ong has increased his holding to 55%, he is in control. Instead of holding Pjd share directly, ong has only transferred it to Osk which he controls. He rather loses out on the smaller investment in order to gain control of Osk. Investment in Pjd around 250m but in Osk prop. 400m. and Osk hold. around 1billion. Win 2 , lose a little in 1. Small price to pay to gain control of Osk which will be cash rich. Osk at present ong holds 41%, sure he will not offer a better deal to Pjd which is a smaller co. and in which he has a smaller holding. If the offer is better to Pjd he will lose big.
What amaze me its div of 15 sen which about rm142m. As at 30 -06-2014 only cash of 1.5m on its book unless Ong already found a buyer for its stake in Rhb. Any price above rm 10 is a coup for Ong.
It look ridiculous at first. Ong is selling his Pjd and Osk prop. to Osk hold. because he knows Osk hold. is worth more than $2. Pjd and Osk prop have yet to do it but Osk hold. has already done it. It has 2.5b and cash is king. Ong has all the infor he needs to come to this decision, we do not. Osk cap on 10th. Oct has provided more than 400m loan to a company, I think it was to Pjd. Now he has to convince shareholders in both the companies. Reasons have to be given. We have to wait for this.
Minority shareholders of PJDev and Osk Property are up on their arms! Director Ong really push the anger button this time! Admist this uproar, OSK is perhaps gem that you should seriously put your money in long run! Buy on dip!
Now EPF cannot vote in the CIMB-RHB merger. What happens now? It would seem our "smart and rich" OLH is going to be a power-broker. Hip - hip - Hooray!!!!!!!! For me, all I want is that OSK will rise up ---- (or will it?) Tomorrow will tell.
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hanting999
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Posted by hanting999 > 2014-10-15 20:36 | Report Abuse
SP0094701, much as I would like to join you in your optimism and confidence, I am not too sure OSK will climb up. During this time of "red numbers", buyers are a bit more careful. Maybe the free warrants and special dividend may help a bit; but buying shares from the Boss just does not excite me. Europe is down and USA is also trending downwards. VERY WRONG TIMING.