thanks for the article but I need to make a very important correction. Even if you vote No, the Exit Offer will be open for a period of 14 days once all Exit Offer conditions have been fulfilled, for ALL shareholders (even those who vote no) to accept the terms. see pages 13-14 here: http://investor.gear.com.sg/newsroom/20221109_021819_AUE_B599T1IV2BCR696W.1.pdf
In other words, the barrier to voting no here is really much lower than you portray. this is quite a crucial point given the amount of value being extracted here. even if you vote No to try to block the deal - as I obviously am, on these heinous terms - you can still take the Exit Offer in the end if it ends up getting voted through.
You basically don't, I think hedging the exchange rate for 6 months would cost you a big % of the spread.
I believe if the IDR goes down a lot in between now and the vote they'd raise the price paid. The earnings of GEMS should rise if IDR goes down against the dollar aswell, since most of their revenues are in USD.
Thank you for this article. I have no faith in the Activist community of investors in Singapore and as you said - there is a deep fear of getting to hold an illiquid private company. The offer terms are daylight robbery and I hope the IFA will assess independently. It wld be great if there are arb funds keen to take a chunk of this and hopefully they come around to acquiring this.
Yeah I wouldn't count with activists or funds getting in. I've calculated that you would need around 92M$ to be able to control the voting (a 25% of the remaining 22.5% not owned by the Widjajas), so it's a pretty big amount.
I'm hopeful the SGX will force them to raise the offer and that the Widjajas will accept. Even if they make them raise it to 0.32 SGD+the GEMS shares/cash they'd still make hundreds of millions of dollars, and we'd make a 25% return or almost 50% annualized, so that's fine by me
thanks for the article but I need to make a very important correction. Even if you vote No, the Exit Offer will be open for a period of 14 days once all Exit Offer conditions have been fulfilled, for ALL shareholders (even those who vote no) to accept the terms. see pages 13-14 here: http://investor.gear.com.sg/newsroom/20221109_021819_AUE_B599T1IV2BCR696W.1.pdf
In other words, the barrier to voting no here is really much lower than you portray. this is quite a crucial point given the amount of value being extracted here. even if you vote No to try to block the deal - as I obviously am, on these heinous terms - you can still take the Exit Offer in the end if it ends up getting voted through.
Nice to know, I missed that, I'll update the article with the info.
How do you hedge against the possibility of IDR weakening further against SGD in the interim
You basically don't, I think hedging the exchange rate for 6 months would cost you a big % of the spread.
I believe if the IDR goes down a lot in between now and the vote they'd raise the price paid. The earnings of GEMS should rise if IDR goes down against the dollar aswell, since most of their revenues are in USD.
Thank you for this article. I have no faith in the Activist community of investors in Singapore and as you said - there is a deep fear of getting to hold an illiquid private company. The offer terms are daylight robbery and I hope the IFA will assess independently. It wld be great if there are arb funds keen to take a chunk of this and hopefully they come around to acquiring this.
Yeah I wouldn't count with activists or funds getting in. I've calculated that you would need around 92M$ to be able to control the voting (a 25% of the remaining 22.5% not owned by the Widjajas), so it's a pretty big amount.
I'm hopeful the SGX will force them to raise the offer and that the Widjajas will accept. Even if they make them raise it to 0.32 SGD+the GEMS shares/cash they'd still make hundreds of millions of dollars, and we'd make a 25% return or almost 50% annualized, so that's fine by me