Tuesday, July 9, 2013

Viz Branz Limited – Finally, a GO (OCBC)

Viz Branz Limited –
Offer price S$0.78
add: 12m dividend forecast S$0.000
versus: Current price S$0.72

Finally, a GO
• Offer of S$0.78/share
• No counter-offer expected
• Shareholders should ACCEPT OFFER

Viz Branz finally announced that its current CEO will launch a general offer for the company at S$0.78/share, which represents a 15.5% premium over the one-month weighted average trading price. The CEO already has a majority stake of 58.1% after acquiring his father’s 38.3% share, so Lam Soon is not expected to launch a counter-offer. As the offer price is above with our long-stated target price of S$0.74, we deem the offer to be fair and urge investors to ACCEPT THE OFFER. Furthermore, the CEO intends to take Viz Branz private and delist from SGX, which would result in limited upside and recourse for minority shareholders going forward.


CEO launches takeover bid
Viz Branz announced Friday that its current CEO, Chng Beng Beng (CBB), has launched a general offer for the company. The offer is valued at S$0.78/share, representing a premium of 15.5% over the one-month weighted average trading price of S$0.675. Mr. Chng currently has a majority stake of 58.1% after acquiring the 38.3% from his father (ex-CEO). Shareholders should start to receive the offer document issued by Credit Suisse from 19 Jul 2013.

Lam Soon expected to yield
In our view, Lam Soon (who has a 20.1% stake) is expected to accept the offer and not launch a separate counter-offer – despite only buying into the company less than a year ago – as the offer price represents an exit opportunity with a reasonable 6% gain.

Conclusion to a long-drawn event
Speculation over a GO was triggered by the Lam Soon acquisition, and we have called for the possibility of a GO for slightly under a year. Nonetheless, we are finally vindicated by this favourable outcome. While our long-stated target price of S$0.74 falls slightly under the offer price of S$0.78, the expectation for a less aggressive acquisition price was still satisfied.

Accept offer
CBB intends to take the company private and delist from SGX. Therefore, with an offer price that we deem fairly values the company, and limited upside and recourse for minority shareholders going forward, we urge shareholders to ACCEPT THE OFFER.



Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 05/07/13

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Warren E. Buffett(沃伦•巴菲特)
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别人贪婪时我恐惧, 别人恐惧时我贪婪
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合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
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