There were many queries following the posting on Can-One.
a) Kian Joo can still dilute by having the warrants issue at 1 sen, if the 32.9% block relinquished their right to subscribe. Comment: That was the case as the court case was still dragging on. It is not going to happen as Bursa rightly has withheld approval pending the decision of the Federal Court. The See family can kiss their sinister plan goodbye.
b) If everyone is saying Can-One is worth RM3.00, why isn't the share racing up to that level? Comment: Its in a rerating process. The court decision is a major factor and catalyst. The second catalyst is the actual crossing of the shares by KPMG, which is supposed to be done today or tomorrow according to market newsflow. The crossing removes the final apprehension, and actually a lot of funds are readying to buy Can-One once that happens. Can-One and KPMG should be working diligently to process this asap so as to take control of Kian Joo (either via appointing their own board members and/or vetoing/approving corporate exercises).
c) Can the See family try to win back Kian Joo? Comment: No, if they are sane. Their stake is less than 10% in Kian Joo, to win control, they have to do a G.O. at much much higher levels (e.g. RM2.60-2.80) and still they may not succeed. If the See family tries that, its so easy for Can-One to up their shares as well with minimal funding requirements. They also cannot do it via Can-One, i.e. take control of Can-One as the controlling shareholder has 51% of Can-One.
d) How will the whole thing develop? Comment: Can-One will take control of the block quickly, call an EGM at Kian Joo quickly, put in their directors and remove some. Call another EGM at Can-One and immediately considers a few viable options. One is to take Can-One private. The other is to go through a rights issue with free warrants, pay down the loan with the proceeds. Or, do a similar merger akin to Sapura/Kencana, where you create a SPV and both parties subscribe shares in it. That would probably value Can-One at around RM2.60 and Kian Joo at RM2.80.
e) 1+1 = 2 or 3? Collectively, they control the bulk of the industry for Malaysia. Hence there will be economies of scale for sure. One thing which many have overlooked is the potential upcoming business of "sweetened milk", which is a major project between Felda and Silverbird. Guess who is the common shareholder in all this?
8 comments:
Bro,
new senerio...Felda is selling in the open mkt
Now Md & Felda holds <51%
hence battle of control of Canone begins...likely more upside if See of Kjoo tries to wrest contol of canone so they will now be the clear winner.... RM241m enough to takeover Canone
Does the delay in announcing the court decision when queried by Bursa on the share price spurt reflect badly on Can One's BOD?
Bro,
contact says crossing will be done today
Felda had been holding CanOne for quite some time isn't it. I think it is normal for them to take some profit since it had surged about 60%
Can One share is very bearish today
One interesting fact that I note from checking out Kian Joo's annual reports for the last 3 years (2008-2010) is that the See family members have slowly accumulated Kian Joo shares. Aside from the 4 Executive directors' shareholdings and including those newer See family members and friendly parties in the Top 30 Shareholders' list, their accumulated shareholdings are easily more than 10%. Assumming the See family use the RM240 million to accumulate more Kian Joo shares from open market, they can easily match Can One's 32% as Can One will not want to breach the 33% that requires them to make a GO.
As such, should Can-One requisite for an EGM to remove the See family members from the board, the outcome may be dependent on how funds like EPF votes assuming the See family managed to accumulate enough shares to match Can-One's 32%.
Your views please?
Hi value,
Agreed the more they buy the better it is for Can-one. I don't think its a fight to control Kianjoo.
I am lookiing only at the potential value to Can-one on the 32.9% buy. Hence as Dali said its a play on Can-one which i totally agree.
I am waiting for the crossing of the shares so that it becomes a certainty
bro,
according to sources from the liquidators, the crossing can only be done once the official papers from the Federal Courts are received......no photocopies are allowed. so i think itmay take up to 2 weeks
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