Chris Hutching
Friday 23rd April 2004 |
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These were some of the questions minority shareholders were pondering this week as 60% shareholder SEA Holdings refused to raise its 40c a share offer for the outstanding shares it seeks even though analysts such as UBS Research contend that the cashed up property developer is worth at least 49c a share.
They have rated it a "buy" to clients (the 49c price represents a discount to valuation of 15%, which has been a common feature in other recent takeovers).
Trans Tasman shares were trading at 42c a share this week.
A minority shareholder said he was puzzled about the takeover because it had no chance of success at the 40c offer price and the recent example of the Shotover Jet takeover showed that if minorities held firm they could achieve a much higher price than initially offered.
Even 49c a share would represent a significant discount to the asset backing of 63c a share.
But the shareholder was also sceptical about the scenario floated in some quarters that SEA would seek 75% and then delist and/or move corporate control to Hong Kong or Singapore.
The takeover documents state that if the takeover bid is unsuccessful then SEA will continue to operate Trans Tasman as a property developer listed in New Zealand.
Making the offer at least achieves one objective for SEA it takes some of the heat out of minority shareholder complaints in the media and in the courts about SEA's behaviour because they have finally been given the option to sell out, albeit at a price most consider outrageous.
Trading in Trans Tasman shares has been relatively light in recent days but arbitrageurs are understood to be looking with interest at the stock, which is likely to offer opportunities before the takeover is fully played out.
Meanwhile, the Trans Tasman board has delayed the annual meeting until May 15, from May 5, to allow the independent directors to consider the SEA offer. Their response will include an independent adviser's report and their recommendation. Existing proxies notified to Trans Tasman will continue to be valid for the meeting.
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