This morning minority shareholders marginally rejected the proposed acquisition by a show of hands (5 against vs 4 for). Those voted against are fine with the rationale of the purchase but not on the proposed terms. Management now has to decide whether to forget about Famous Bedding or to try again with different terms.
scbChan, Have you consider the possibility of Wong launching a privatisation offer? The way he and his wife have been buying everyday seem to hint hint at this possibility. Maybe he is thinking \"wah, you Singapore investors don\'t give me high PE for my hard work, and still don\'t support me in my growth plans... Fedback, might as well privatise the whole company.\" :laugh: :laugh:
In my opinion, there is no advantage for him to privatise the company. In fact, according to their VP Sales who was in the Q2 briefing, their SGX listing status is an asset in their marketing effort overseas. These days buyers are concerned with the financial position of furniture manufactures so being a public company gives them an advantage over their non public competitors. Since Singapore as a country is viewed favourably in PRC\'s mind, their SGX listing is also used in their marketing effort in China. I have personally seen the \"listed in Singapore\" tag line in their advertising signboard along a major highway near Shanghai. Mr Wong will receive about S$2.1 million interim dividend next Monday so his recent buying could be his desire to invest his dividend back to Man Wah, taking advantage of current low price. Regarding the Famous Bedding purchase, he will gain more as a majority shareholder if the issue price of Man Wah shares in exchange of Mr Yu\'s 30% holding of Famous Bedding can be raised to a more reasonable level. Any additional dilution effect will hit him as much as minority shareholders. So he should not be unhappy with the rejection of the acquisition based on current terms. Their announcement last night has clearly communicated that they understand why minority shareholders turn down this acquisition. I think they will convince Mr Yu to sell Famous Bedding at a more reasonable price in line with current environment. Let\'s wait and see.
I beg to differ. My opinion is that the Chinese people are proud people. By not voting for the acquisition, the management would feel a loss of face. I think Wang will not proceed with the acquisition. Then the shareholders lose a chance to participate in the PRC bedding growth story. Wah Lau :woohoo:
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