HIAP HOE has crossed the 90-cent level, now 93 cents. I enjoy this big move up from 70 cents in July 2017. What a show — in addition to some small dividends. Ogre, do you think Privatisation is on the cards?
The recent purchase by Hiap Hoe Holdings has definitely improved investor sentiment. I think privatisation is still on the cards. For Hiap Hoe Holdings to purchase the remaining shares (25% of 470M is 117M shares)) in the market to privatise should be chicken feet for them. At an offer price of S$1.20 (80% of NAV), they will only need to raise $141M.
Why Privatise?
- Reduce cost associated with listing.
- No longer need to answer to public shareholders.
- Seriously start to sell their investment properties to enjoy the profits. I think they have been delaying in selling their investment properties so they will not have to share the profits with the current shareholders.
Why stay listed?
- Easier to raise funds. (Overseas banks more willing to lend to listed entities.)
Why I think they are trying to Privatise?
- No more new development projects even though other developers have been active. Hence no need to borrow more money.
- Buying large chunks of shares through private deals (they seem to be seeking out big shareholders). This will help to reduce the takeover cost.
