Thursday, August 30, 2018

TA's verdict - How should we act?

Tony Tiah, the controlling shareholder of TA Enterprise has made an offer to buy all the remaining shares of TA at RM0.66. That exercise is to allow him to get across the 33% General Offer threshold.

In my opinion, it is to allow himself to buy more. Since the offer announcement, he has been accumulating some 3+% of TA's shares that he is now owning 36.369%.

Why? Because he just wants to own more. The way to do it is to control the share price at low and as he buys to trigger the 33% threshold, he is forced to purchase at highest price transacted which was 66sen.

Is it fair? Well this is the independent report from BDO, which is one of the better more willing to take a fairer and neutral job. Others such as an independent advisor whose name starts with an "M......", we can be more careful. In this exercise, it says TA's share price is between RM2.59 to RM2.60, a whopping 74.5% discount from the offer price. See below.

One can also read the full report by BDO, which is also one of the few chance to allow us to see the good assets that TA Enterprise owns - where a large portion of it is also owned through TA Global.

Since the price is so low, it is obvious that Tony is offering to purchase more of it. It appears that he is in fact prepared to buy more.

BUT - a big one, will the share price go up?
Hard to say, the exercise does allow Tony Tiah to wrangle himself out from the 33% General Offer trap. From now on, he can take his time to purchase more of his shares, and as sometimes the saying goes, "He has time." He may be taking his own sweet time to accumulate and not be trapped by the regulation until he reaches another threshold which is 50%. He is like the same when building properties i.e. the TA 3 and 4 next to KLCC, that has been postponed for uncountable times. He is just waiting for the right time to make his move.

On my opinion, whether the shares is undervalued? IT IS. BUT...not all undervalued shares will move as it should be...


Cj said...

Dear Felicity, mind to share your view on latest Ekovest QR? Thanks!

felicity said...

Cj said...

Thank you felicity!

Unknown said...

I rejected the offer. how about you?