Saturday, January 24, 2015

Privatizing Of Keppel Land by Keppel Corp - Two Side Of Reactions

So now we know why the Keppel Corporation's (BN4) counter was halted since Wednesday (21/01/2015), from the report that I read this morning, Keppel Corp is in the move to take their property arm, Keppel Land (K17) private. 

If the deal went through, it will be one of the biggest privatizations in recent year with a whopping $3.2 billions at stake. So, what is the deal? 

Keppel Corp will offer $4.38 per share of Keppel Land (this is about 20 percent above Keppel Land's last traded price of $3.65 on Tuesday). To top it off, it will bump up the price to $4.60 apiece if it manages to buy the whole company (which is 26% premium ).

Note :
The Net Asset Value (NAV) for Keppel Land as at 31 Dec 2014 is $4.95. 
The Net Asset Value (NAV) for Keppel Corp as at 31 Dec 2014 is $5.73 and its last traded share price is $8.10 on Tuesday (which is traded at 41% premium)

Whether you are currently holding the counter or not (if yes, some of you might be smiling wide wide already), there are always two side of reactions to such news (especially we are talking about a blue chip counter here) i.e. :

The Happy Bunch :
If you are an existing shareholder and went in with the short-term trading mindset, you can reap the fruits immediately without the need to wait for the stock to chiong upwards.

If you are currently not an existing shareholder, there is one less stock for you to analyse lol  

The Not So Happy Bunch :
If you are an existing shareholder and went in with the long-term investing mindset, you might find it a short-changed deal (since the offer price, even the bump up offer is below the NAV). Also, you might view it as losing one dividend yield cash-cow.  

If you are currently not an existing shareholder, there is one less stock for your to take advantage with lol

Personally, I am not vested in both Keppel Corp and Keppel Land and I belongs to the "Happy Bunch" camp. ;-)

So, which camp are you in?

Cheers! 

2 comments:

  1. Hi Richard,

    I belong to the not so happy bunch because I'm not an existing shareholder. Haha!

    ReplyDelete
    Replies
    1. Secret Investors : Ooooh! Means you are potential shareholder that missing the boat lol ;-)

      Delete

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