ANALYSING THE NEWS: DMG SECURITIES The news: United SM Holdings (offerer) has made a voluntary unconditional cash offer of SGD0.88 per share for Guthrie GTS in a move to take the company private. United SM Holdings is a joint venture company owned by Anthoni Salim and Putra Masagung, and the JV owns 69.15% of the outstanding shares in Guthrie. Together with shareholders who have undertaken to accept the offer, the offerer has so far secured undertakings amounting to 70.64% of Guthrie’s outstanding shares. It intends to delist the company if it secures over 90% of Guthrie. Our thoughts: United SM Holdings’ offer represents a premium of 21% over its traded price of SGD0.725, but is at a 13% discount to its NAV of SGD1.01 as of March 2013. Guthrie’s core businesses include property, engineering and leisure, but the property division has been the key growth driver of the group accounting for over 80% of group profits and asset base. Under its property arm, Guthrie owns and manages retail malls and commercial assets. It is also involved selectively in residential development, with a 60% stake in DBSS project Adora Green, which is fully sold by end 2012. Guthrie’s crown asset is arguably its 50% stake in retail mall Jurong Point. Its overseas assets include its 5-star Pullman hotel in Jakarta, Mercure Vientiane in Laos and Novotel Bali Benoa, all of which are recorded at cost in its books. This suggests upside to its reported NAV if the assets are revalued to market.
Posted on: Mon, 24 Jun 2013 01:32:11 +0000
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