Temasek Unit Offers to Buy Olam in $4.2 Billion Cash Deal

[Latio2005A]

Come across this: http://www.tremeritus.com/2014/03/16/balding-temasek-slow-at-spotting-value-and-buying-out-olam-with-odd-timing/

 

Make sense? Or on hindsight?

 

Edited March 16, 2014 by Latio2005A

[Porker]

 

Hahaha

 

Actually not all their companies are chui, Temasek got winners too.

 

SingPost is a decent company.

 

It's domestic mail revenue accounts for approx. 55% of the total mail revenue which is also the largest revenue generator. Is this business regulated and a monopoly as well?

[Sabian]

 

It's domestic mail revenue accounts for approx. 55% of the total mail revenue which is also the largest revenue generator. Is this business regulated and a monopoly as well?

I think the local courier service is no longer protected.

 

For local mail, their first mover advantage and entrenched network gives them a natural moat against would be competitors even if it's not protected.

 

But the 55% will shrink more over time. They face the same problem as SPH and Singtel.

 

Need to reinvent themselves.

[Icu]

http://www.todayonline.com/business/recent-sharp-gain-olam-shares-fuels-concerns-over-possible-insider-trading

 

Too obvious when considered to its peers... What is the regulator doing?

[Little_prince]

 

It's domestic mail revenue accounts for approx. 55% of the total mail revenue which is also the largest revenue generator. Is this business regulated and a monopoly as well?

regulated by ida lor...no longer a monopoly since 2007

 

www.ida.gov.sg/Policies-and-Regulations/Industry-and-Licensees/Postal

I think the local courier service is no longer protected.

 

For local mail, their first mover advantage and entrenched network gives them a natural moat against would be competitors even if it's not protected.

 

But the 55% will shrink more over time. They face the same problem as SPH and Singtel.

 

Need to reinvent themselves.

yeah. Now moving into e commerce and beefing up quantium solutions

[ShepherdPie]

Not necessarily. Some cornerstone investors are very passive and just park their money there. Man-in-the-street investors even more no need to say. When buying from those who manage the company, when the premium is so low and yet they willing to sell, well, form your own conclusions.

 

 

 

dun think TH will eventually delisted and run olam ptely. The way i see.. the policy barrier will be huge. I am sure they will run into some countries' policy if they are main shareholder given that TH is a soverign fund.

 

In any case , NAV is 11 compared to other commodity counters at 16.. It's not losing deal to TH either. It's a good move for a country like sg which could not produce enuff food for its own consumption.

Overall, sell and move to $$ to other counter if you breakeven / make $$. If you bought at 2.5@ then, maybe not a bad idea to wait longer.

 

In any case, if you looking at parking $$ somewhere for next few years... Olam bond now is very attractive at 6.75pa.

 

Aniway, this is a bad forum to seek advise on TH related shares.. alot of gov bashing.. before you get a sensible response.

Edited March 17, 2014 by ShepherdPie

[Porker]

 

dun think TH will eventually delisted and run olam ptely. The way i see.. the policy barrier will be huge. I am sure they will run into some countries' policy if they are main shareholder given that TH is a soverign fund.

 

What do other countries' policies have to do with delisting Olam from the SGX?

[ShepherdPie]

 

What do other countries' policies have to do with delisting Olam from the SGX?

 

Correct me if i am wrong...

 

TH is calling to acquired all the floating shares in the mkt. If they sweep up majority of the shares from SGX , olam will be delisted in the event less than 10 percent is in the mkt. 90% is wiped out, it will also means that that TH will have a controlling stake in Olam.

 

This may trigger policies in the varies countries that prevents foreigner soverign fund from controlling their agriculture mkt.

 

So my conclusion, is that TH has little intention to have a controlling stake, let alone delist olam. I feel it's more like a move to "kill" MW perm

Edited March 17, 2014 by ShepherdPie

[Sabian]

 

Correct me if i am wrong...

 

TH is calling to acquired all the floating shares in the mkt. If they sweep up majority of the shares from SGX , olam will be delisted in the event less than 10 percent is in the mkt. 90% is wiped out, it will also means that that TH will have a controlling stake in Olam.

 

This may trigger policies in the varies countries that prevents foreigner soverign fund from controlling their agriculture mkt.

 

So my conclusion, is that TH has little intention to have a controlling stake, let alone delist olam. I feel it's more like a move to "kill" MW perm

 

I see where you coming from but I don't think so. Olam isn't that dominant like ADM, Bunge, Cargill or Dreyfus.

 

I may be wrong (I don't follow Olam stock) but never heard of Olam having to seek permission to acquire any agri asset from the host country's regulators.

Edited March 17, 2014 by Sabian

[ShepherdPie]

 

I see where you coming from but I don't think so. Olam isn't that dominant like ADM, Bunge, Cargill or Dreyfus.

 

I may be wrong (I don't follow Olam stock) but never heard of Olam having to seek permission to acquire any agri asset from the host country's regulators.

 

just a opinion.. i may be wrong.. but 2.23 is actually a very low call ..given the NAV and the heating up commodity mkt..

 

.. I was looking at $3 to sell my olam share which i bought at $1.6. Then again, i am happy to booked the profit at $2.23 and move on.. given that I have already gain from from the issued bond and warranties.. ;)

Edited March 17, 2014 by ShepherdPie

[ShepherdPie]

knn. at least last time Ong teng cheong will hug our piggy bank tight tight.

 

pek moh will help take hammer to open the piggy bank

 

although i respect what President Ong did the last time.. but i think there may be stories we are not told...

 

And his actions does show that he is not a team player.. which could be dangerous then.

Instead of convincing the rest... he chosen to "expose" it.. which i think is pretty unwise for a president.

Edited March 17, 2014 by ShepherdPie

[Wyfitms]

 

 

Temasek is major shareholder in SingPost leh...then SingPost how?

 

chui theory only applies to companies that are not a monopoly

[Fabiaman]

Its good that Tem intends to keep Olam listed.

 

In this way, Olam will need to continue to be transparent on their future earnings and balance sheet. We need that.... as their new shareholder will include all Singaporean citizens. If its private, none of us can see how Olam is doing.

 

Secondly, we also need accountability from Tem in this acquisition. Despite the strong case made by Muddy Waters, Tem has not only gone contrary to the research findings, Tem showed hand on Olam instead. So Tem must be so confident beyond any doubt that Olam is a great company with a valid business model. Well, I am not an expert and Tem is.... so let Tem show us why Muddy and sceptical investors are wrong. Thanks Tem for keeping Olam listed and not sweep this under the carpet.

Edited March 18, 2014 by Fabiaman

[Sabian]

 

chui theory only applies to companies that are not a monopoly

Then Keppel Corp?

[Porker]

Its good that Tem intends to keep Olam listed.

 

In this way, Olam will need to continue to be transparent on their future earnings and balance sheet. We need that.... as their new shareholder will include all Singaporean citizens. If its private, none of us can see how Olam is doing.

 

Secondly, we also need accountability from Tem in this acquisition. Despite the strong case made by Muddy Waters, Tem has not only gone contrary to the research findings, Tem showed hand on Olam instead. So Tem must be so confident beyond any doubt that Olam is a great company with a valid business model. Well, I am not an expert and Tem is.... so let Tem show us why Muddy and sceptical investors are wrong. Thanks Tem for keeping Olam listed and not sweep this under the carpet.

 

The offer by Temasek Holdings Pte’s unit to take over Olam International Ltd. (OLAM) is credit negative for the Singapore state-owned investment company, according to Moody’s Investors Service.

 

The acquisition, which values one of the world’s top three coffee and rice traders at S$5.3 billion ($4.2 billion), will put pressure on Temasek’s “portfolio liquidity,” Moody’s, which rates the investment firm at Aaa, said in a March 17 report. Olam’s 2 percent dividend yield in 2013 is also lower than Temasek’s return of about 3 percent, it said.

 

“Bringing a new company under the Singapore umbrella negatively pressures portfolio liquidity,” Alan Greene, a senior credit officer at Moody’s, said in the report, which estimates 65 percent of Temasek’s S$215 billion investments are in Singapore dollars.

The bid by Temasek’s unit reflects growing interest in agricultural assets as rising global populations and emerging middle classes boost food demand. Breedens Investments Pte offered S$2.23 cash per share, a 12 percent premium to Olam’s closing price of S$1.995 before the bid was announced on March 14.

 

Temasek, which owns 24.6 percent of Olam according to Moody’s, is the company’s biggest shareholder. It increased its stake after concerns raised by short-seller Carson Block in November 2012 caused the stock to plummet.

Temasek is the largest investor in four of Singapore’s 10 biggest publicly traded companies, including Singapore Telecommunications Ltd. and DBS Group Holdings Ltd.

 

“The high concentration of investment in Singapore-listed companies and the large size of each shareholding reduce portfolio liquidity,” Greene said. “This feature is markedly different from the typical, more broadly spread sovereign wealth funds that can adjust their holdings rapidly without moving markets or requiring placements or trade buyers to effect disposals.”

[TJX]

Olam can Never be in the league with the ABCDs. Based on temasick track records, Probably will end up like ABC.....

[Kb27]

 

The acquisition, which values one of the world’s top three coffee and rice traders at S$5.3 billion ($4.2 billion), will put pressure on Temasek’s “portfolio liquidity,” Moody’s, which rates the investment firm at Aaa, said in a March 17 report. Olam’s 2 percent dividend yield in 2013 is also lower than Temasek’s return of about 3 percent, it said.

 

“Bringing a new company under the Singapore umbrella negatively pressures portfolio liquidity,” Alan Greene, a senior credit officer at Moody’s, said in the report, which estimates 65 percent of Temasek’s S$215 billion investments are in Singapore dollars.

The bid by Temasek’s unit reflects growing interest in agricultural assets as rising global populations and emerging middle classes boost food demand. Breedens Investments Pte offered S$2.23 cash per share, a 12 percent premium to Olam’s closing price of S$1.995 before the bid was announced on March 14.

 

Does that mean my retirement age will be 100 now ?