Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Kayin Holdings, the 68.23% shareholder of <a href="https://www.smartkarma.com/entities/10633" target="_blank" data-smartkarma-citation="entities:10633:1">Selangor Properties (SPR MK)</a>, the largest landowners in Damansara Heights, has <a href="http://www.selangorproperties.com.my/wp-content/uploads/2018/10/25-1-others.pdf" target="_blank">proposed</a> a selective capital reduction and a corresponding capital repayment of RM5.70/share (a 40.39% premium to last close and a two-year high) in SPR for all remaining shareholders.
Conditions include ≥75% of disinterested shareholders voting for the proposal, and ≤10% against.
However, the proposed offer price looks off. Four years ago, SPR sold a 6.3-acre parcel of land in Damansara Heights, which now forms part of Pavillion Damansara Heights. SPR continues to hold 15 acres in close proximity to Pavilion (and other mega projects); but that undeveloped land is on the books at a fraction of the price/sqft to the 2014 sale. This has also been<a href="https://www.edgeprop.my/content/1438677/dissenting-voices-selangor-properties%E2%80%99-privatisation-offer-says-report" target="_blank"> flagged</a> by Pangolin Investment Management, a 1.24% shareholder in SPR.
The company is also net cash (~RM2.15/share), sufficient to fund the RMB622mn acquisition of all shares not owned by Kayin.
SPR's board has until 17 December in which to support the proposal. On the assumption the board backs the Offer, completion will likely take place within 3 months. 
The premium is decent and does provide an exit for shareholders in what is a very illiquid stock. Yet there is conceivably more value - a lot more value - over and above this offer. Minority shareholders should argue their case for a larger payout.

Kayin Holdings, the 68.23% shareholder of Selangor Properties (SPR MK), the largest landowners in Damansara Heights, has proposed a selective capital reduction and a corresponding capital repayment of RM5.70/share (a 40.39% premium to last close and a two-year high) in SPR for all remaining shareholders.
Conditions include ≥75% of disinterested shareholders voting for the proposal, and ≤10% against.
However, the proposed offer price looks off. Four years ago, SPR sold a 6.3-acre parcel of land in Damansara Heights, which now forms part of Pavillion Damansara Heights. SPR continues to hold 15 acres in close proximity to Pavilion (and other mega projects); but that undeveloped land is on the books at a fraction of the price/sqft to the 2014 sale. This has also been flagged by Pangolin Investment Management, a 1.24% shareholder in SPR.
The company is also net cash (~RM2.15/share), sufficient to fund the RMB622mn acquisition of all shares not owned by Kayin.
SPR's board has until 17 December in which to support the proposal. On the assumption the board backs the Offer, completion will likely take place within 3 months. 
The premium is decent and does provide an exit for shareholders in what is a very illiquid stock. Yet there is conceivably more value - a lot more value - over and above this offer. Minority shareholders should argue their case for a larger payout.

Selangor Props - Privatisation Offer Does Not Reflect Full Value