Monday, April 30, 2007

Coffee Shop Talk Over The Weekend

Friend: Hey, I tell you something very exclusive ...
Me: Go on.
Friend: Unbelievable la...
Me: Go on or I will be going.
Friend: Maxis to be privatised la
Me: You got to be joking!
Friend: I know, some more its for 41bn ringgit
Me: If it was a stranger telling me this, I would whack him over the head already, but since its you, I'd give you the benefit of doubt. Very rarely do you find telcos being taken private because they need huge capital spending, need to tap capital market. Then they usually have a low NTA to share price as they have little real assets such as land or buildings. Their assets are in the infra they built and the subscribers they have.
Friend: Yea, its unbelievable but this source very choon-la.
Me: I guess they could take it private as Maxis is printing money, but they are also investing into Indonesia, India and Sri Lanka... which requires capital. Come to think of it, their free cash flow is sufficient to for that.
Friend: Think some more.
Me: If you are having 1-2 bn free cash, take the company private, then assemble all your foreign telco holdings and relist in Singapore, Maxis could come out in front. I mean, Usaha Tegas could come out in front. Actually since you mentioned 41bn ringgit, can see whether got some truth in it by doing some exercise.
(2 minutes later)
Me: Chee b.. , 41bn equals about RM16.20. Compared to closing RM13.00, looks real and believable. Did my computation, all covered warrants would gain 100% or near that if the news is true.
Friend: Ya la, no harm right, opening Monday buy a few hundred k Maxis-CD at 20 sen. If it turns out well, good la, if not, Maxis is not going to tank, right?
Me: Sounds OK, but I tell you, taking a telco private is rare indeed.

(Monday morning, Chee-b.. the stock suspended..)


Ultra said...

From BursaMalaysia announcements:


The Company had on 30 April 2007, requested for a suspension of trading of its securities from 9.00 a.m. on 30 April 2007 to 5.00 p.m. on 3 May 2007.

The Company has received notification, after close of business on 27 April 2007 from Usaha Tegas Sdn Bhd ("UTSB"), a substantial shareholder of the Company, that UTSB and its affiliates intend to launch a voluntary general offer through a special purpose vehicle for all the ordinary shares of the Company. UTSB has indicated that, barring unforeseen circumstances, the notice of takeover offer will be served on the Company on or before 3 May 2007.

When I saw this, my reaction was "..." (speechless).. this post was so 'cun'...

If this kinda trend continues (as with PPBOil) I can't help but just wonder what kind of companies would remain on Bursa Malaysia in future.


Salvatore_Dali said...


of course we can bitch about companies being taken off the list for general investors, but AK's style, they can reemerge in more expensive ways after AK has profited, remember Bumi Armada... you will not be able to stop privatisation because if the mkt fails to value stocks properly, anybody who can top the price offered should be able to take em private.

i like pnb's style, if you give pnb 5bn ringgit this year, they are staring at 1300 for the index, if they plonk for listed companies, the index would have to get to 1430 before they get 10% return ... looking at their own stable of companies, in particular with the revaluation of properties, land and plantations, taking some of them private may give a return of 15% p.a. ... kudos to pnb for having the foresight and financial acumen to do the right thing.

cin said...

Aiyaaa... Dali could have, should have, would have told us all these before market close last Friday.

Salvatore_Dali said...


before u clobber me, read my posting carefully... "OVER THE WEEKEND" meaning I wanted to punt some this morning la...

cin said...

Didn't I said "would have"???

Salvatore_Dali said...


lol, fair enuff... maybe I didn't practice The Secret hard enuff ... visualise man, visualise ... I think AK did ..

lionfish said...


What do you think abt the recent price weakness on Tenaga? There are a lot of call warrants on this big blue chip... Earnings are growing but the stock is a big laggard vs the KLCI... I think at current levels, the mother is trading end-2006 while the KLCI has moved up 20% YTD already...

Jaack1 said...

Dear Dali,

Tks for sharing.

Do you think here is going to be
some spin off effects on MEASAT?


Salvatore_Dali said...


diff animal, plus measat rev stream not all there yet... hard to value the invested expenses, depreciation ... hard to value, means no pt taking private

TK said...

Dear Dali,

If a company is being privatised, how would it normally affect the price of its warrant?

Anonymous said...

Is that friend Mr. Chee?

So did Mr.Chee buy?

If Mr.Chee buy, sorry bought, wah....This Mr.Chee really buy loh!

Weekend Fun Punt!


Salvatore_Dali said...

if its a company issued wrt, the offer would take into account outstanding wrt and make a similar offer for rest of wrt ... if its covered, the company couldnt care shit ... as in most privatisation locally, share px would go to 95%-100% of offer px and stay there till all approvals have been met, hence no pt going for long maturity ones, even covereds expiring in a week's time would be ok

no its not a mr. chee, come to think of it, i don't know any mr. chee, btw, the friend of a friend, all did not get a single maxis covered, all got info over the weekend, as in AK's style, nothing got leaked out, very pro, even investment banker did not leak out, i guess if you did, u can forget about doing biz with AK... sigh even Ralph Marshall's lover did not buy I guess

tucows said...


Maxis is a big fish in a small pond. What your friend say is true. Soon what Maxis earn is a speckle as compared to their returns from India.

Our CI pond is too small for it and getting smaller by the day. UTSB has better and bigger ponds to play to realise the "true" potential of Maxis.

Bravo AK!

tucows said...

your sources say RM16. fyi that is as close as it gets. "little bird" said that its 20% premium on the last trading price.

Salvatore_Dali said...


enjoys yr lead moderator role in TBM chatbox, seems i am the only place where a 41bn ringgit figure is quoted, see whether the info is choon or not, pitiful bystanfder we all

xfrenzy said...

Going from past records on AK's privatization of Powertek and Bumi Armada, I don't believe the price tag will be any close to 20% premium of the last traded price.

But hey, I didn't check the past records. It just came off my mind.

Let's see ... $14.00 tops. Place yer bet-tos !

xfrenzy said...

Powertek ... VGO @ $8.50 back in '03. Last traded price ?

Bumi Armada ... MGO @ $7.00 back in '03. Last traded price ?

tucows said...

hi dali

Sorry to dissappoint you but I am not any moderator in any blog.

Just a happy go lucky tucows looking out for $$$.

by the way, powertek's VGO is 33% premium from last traded price and bumi armada's VGO is 6% premium from last traded price. (last traded price = last price before VGO is announced)

To note that bumi armada share price surged 15c after announcement of VGO.

tucows said...

hi, sorry for typo...bumi armada is MGO not VGO

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