Wednesday, 13 June 2012

My thoughts on Wing Tai's 15% Partial Offer

Late May, the Cheng Brothers made an offer of 15% of shares in Wing Tai at $1.39.
This partial offer is a shrewd move to get a bigger share of the company at a cheap price (relative to RNAV) for them.

The recommendation in page 56 of the Offeree Circular summarizes the crux of it:

Excerpt --->
"Shareholders with a short term view or those that wish to partially monetise their holdings
should accept the Partial Offer and if they wish, tender excess Shares if they are unable to
obtain a price higher than the Offer Price on the open market.
Shareholders who are prepared to take a longer term view of the investment in the Shares and
/ or who are positive about the prospects of the Company may wish to retain part or all of their
Shares. Shareholders who wish to retain their Shares should note that the future performance
of the Shares is dependent on, the performance and future prospects of the Company, general
sentiment in the equity market and prevailing equity market conditions."

It truly depends on the investor's perspective in each case.

I will accept the Partial Offer.
Because it allows me to realise a 10% profit in 3 months on this counter.
Yet will still allow me to retain some holdings in Wing Tai too.

My overall aim now is to add to the cash component of my portfolio as I do sense a GSS coming soon, if it hasn't occured yet.
Will be watching the situation closely.  :-)

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