Saturday, October 17, 2009
NSTP & Media Prima, Not That Fair To NSTP But What Can you Do
Business Times: Media group Media Prima Bhd (MPB) today made an offer to take over New Straits Times Press (M) Bhd (NSTP) through a 1:1 share swap to create largest integrated media group in the country. The share swap offer, at an issue price of RM2 each, also comes with one free MPB new warrant for every five NSTP offer shares accepted.
Hmmm... think i should get a share of advisory fees ... http://malaysiafinance.blogspot.com/2009/10/unique-situation-of-nstp-media-prima.html
Comments in my 5th October posting:
Of course if Media Prima manages to get away with this, its share price will move a lot higher. Media Prima is not going offer cash and owing to its high debt levels... a share issuance is likely. A better proposal will be to issue some shares and new warrants to NSTP shareholders. The warrants would add as a kicker because if the offer was paltry, Media Prima shares will rise and in the end NSTP shareholders will still benefit. But that still should not be the correct way. I have heard that there might be a one for one share issue, considering Media Prima is some 20% below NSTP's share price, it does not look good. Two Media Prima shares for one NSTP would be considered as fair, even though that is still below NSTP's NAV, but is not likely to happen. I would then suggest to do a one for one share issuance/swap and also give NSTP shareholders a 3 for one free warrants (expiry in 5 years) in Media Prima, with the conversion price at RM1.50. That way, I think the corporate finance deadweight on Media Prima will be much less, and NSTP shareholders will get a very good kicker.
Anyways, 2 free warrants for every 10 shares is good I guess. I think that Media Prima shares would rocket as this deal favours them no end. I think RM2.00 is no problem for Media Prima. The warrants if it has an exercise price of RM1.80 would trade around 40 sen at a minimum. Not much upside left for NSTP but tons of it for Media Prima.
p/s photos: Aum Patcharapa Chaichua