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Joelton
Supreme |
01-Jun-2023 08:39
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Golden Energy&rsquo s independent financial adviser hits back at Sias&rsquo recommendation to reject exit offer
SINGAPORE - W Capital, the independent financial adviser (IFA) in the exit offer for Golden Energy and Resources (Gear), has hit back at criticisms of its opinion by the Securities Investors Association (Singapore), or Sias, and a senior correspondent of The Business Times.
In two separate statements, the IFA laid out explanations for its approach to valuing the shares of Golden Energy Mines (Gem), its valuation methodologies for the exit offer and its opinion.
Gear shareholders are to vote on two resolutions &ndash a distribution in-specie of Gem shares and an exit offer of cash for Gear shares.
In valuing the Gem shares, W Capital said that the trading liquidity for the shares in the past 12 months had been low, with its average daily trading volume of 127,500 shares representing 0.029 per cent of the free float.
The IFA was thus of the view that the market prices of Gem shares may not necessarily serve as a meaningful reference point or indication of fair value.
The low free float and liquidity of the shares led the IFA to adopt the market approach to value Gem shares based on the enterprise value (EV) to earnings before interest, depreciation and amortisation (Ebitda) multiples of selected comparable companies.
EV to Ebitda is a financial metric used to evaluate the value of a company compared with its earnings.
W Capital also offered explanations for its valuation methodologies for assessing the distribution and exit offer. It said Sias&rsquo allegation that the IFA had over-emphasised EV to Ebitda to set a lower bound &ndash was &ldquo grossly inaccurate&rdquo .
Sias had questioned the valuation methodology adopted by the IFA on the grounds that it was too generalised for the comparable companies.
Mr Wayne Lee, the chairman and chief executive of W Capital, said the methodology it used &ldquo is one of the most commonly used and acceptable valuation methodologies&rdquo , and &ldquo the most appropriate approach to be adopted in arriving at the estimated range of values of the shares&rdquo .
The reason for not including the entire list of Indonesian comparable companies for the Gem comparable-companies list was to prevent a skewing towards listed Indonesian thermal coal producers&rsquo trading multiple. Instead, the IFA wanted a more comprehensive list of Singapore-listed, Australia-listed and Indonesia-listed thermal and metallurgical coal mining companies to better reflect Gear&rsquo s business profile.
W Capital also hit back at Sias&rsquo allegation that it conflated the distribution and the exit offer. The IFA cited the letter from the Singapore Exchange, which required W Capital&rsquo s opinion to state whether the distribution and exit offer, when taken together as a single transaction, were fair and reasonable.
&ldquo The IFA letter, as contained in the circular, complies with SGX-ST&rsquo s (Singapore Exchange Securities Trading&rsquo s) directions, and there has therefore been no deliberate attempt to conflate the two corporate actions as alleged,&rdquo said Mr Lee.
The IFA acknowledges that no single method of valuation will be met with universal acceptance and humbly respects differences in views and opinions.
&ldquo The board of W Capital Markets would like to put on record that we have always been mindful and use our best endeavours to ensure that we exercise due care, skill and professional judgment in all advisory engagements, and we firmly believe that our IFA opinion in respect of the proposed distribution and exit offer is supported by reasonable grounds and assumptions,&rdquo he added.
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ysh2006
Supreme |
01-Jun-2023 06:51
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If reject the offer need to wait for years to have another offer how ? Many guru said market going to crash soon .....I think fair or not is ownself decide and at what price we buy lah...if those buy at 30-50c can consider good price lah.. | ||||
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Catrade
Master |
31-May-2023 21:25
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Today BB spent abt $3.77m shorting 3.98m Golden Energy shares at 94.5c/pc near to the closing bell. I wonder who r the Sellers n Buyers? Is this got to do with the recent Business Times analyst n SIAS rebuttals of the IFA term of " Fair & Reasonable" on the low ball offer of GEAR and also the " Interconditional Resolutions" of GEMS Distribution & Exit offer of 18.1c? I' m looking forwards to what SGX_RegCo think?
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Joelton
Supreme |
31-May-2023 10:15
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Sias recommends Golden Energy and Resources shareholders reject exit offer
THE Securities Investors Association (Singapore) or Sias, is recommending Golden Energy and Resources (Gear) minority shareholders reject the exit offer by the controlling shareholders.
Minority shareholders have been asked to accept the distribution in-specie of Gear&rsquo s Gem stake and the cash alternative at S$0.792 per Gear share.
In an e-mail to Gear&rsquo s board of directors, David Gerald, president of Sias, said that the independent financial adviser (IFA) had conflated the two corporate actions of the exit offer and the distribution of Golden Energy Mines (Gem) shares. This was despite the issue being highlighted as a concern in a press statement by Sias after meeting Gear representatives.
Gear&rsquo s offeror, Duchess Avenue &ndash a company linked to the Widjaja family &ndash has offered S$0.181 per share, with the offer linked to the distribution in-specie of Gear&rsquo s Gem stake. The IFA, W Capital Markets, issued a &ldquo fair and reasonable&rdquo opinion on the delisting proposal.
Gerald wrote: &ldquo Clearly, SGX RegCo&rsquo s reminder to the IFA regarding the utilisation of appropriate valuation methodologies and the necessity for analysis supported by reasonable grounds and assumptions capable of withstanding scrutiny has seemingly fallen on deaf ears.&rdquo
Referencing Monday&rsquo s (May 29) edition of the Mark to Market column in The Business Times,(&ldquo Golden Energy&rsquo s delisting: IFA opinion is faulty&rdquo ), Sias said that it has from the onset cautioned the IFA against conflating the two corporate actions. In the column, senior correspondent Ben Paul had pointed out that the IFA has reduced the value of the Gems distribution by as much as 42 per cent from 6,500 rupiah (S$0.58) to between 3,773 and 4,277 rupiah.
Subsequently, the IFA&rsquo s sum of the parts analysis for Gear was reduced to S$1.041 from S$1.104.
Sias questioned the new valuation metric introduced by the IFA, enterprise value (EV) to trailing 12-month (TTM) earnings before interest, taxes, depreciation and amortisation (Ebitda). This approach generalises companies that are too different, especially one going private with no future price discovery.
The inclusion of a 0.44 EV/TTM Ebitda Indonesian company as comparable to Gear was also questioned by Sias. The company is only a fifth of Gear&rsquo s size, and its selection lowered the EV/TTM Ebitda ratio.
There are a number of questions Sias has for the IFA, such as: How were the TTM Ebitda metric calculated, and was it from audited results? How does the market capitalisation of the selected companies, which ranged from US$354 million to US$6 billion, impact the multiple?
&ldquo There are simply too many judgement calls made that only prompts further questioning of the IFA&rsquo s approach,&rdquo said Gerald.
While Sias acknowledged that there are many ways to value companies and there is no single method that is universally accepted, it noted that the IFA has heavily emphasised the EV/TTM Ebitda metric, leading to a lower bound.
The opinion of the IFA does not withstand scrutiny nor meet the expectations set by SGX RegCo, said Sias. It called on the IFA to incorporate more valuation methodologies in its analysis and justify any judgement calls in the process.
Sias is urging the minority shareholders to make their voices heard by making their vote count. The resolutions require 75 per cent approval from minority shareholders. But the resolutions are inter-conditional.
&ldquo Should minority shareholders reject the exit offer, Gear will remain on SGX holding on to its valuable Stanmore stake along with Gems. After months of hard work, shareholders go back to square one,&rdquo said Gerald.
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wehuattogether88
Supreme |
31-May-2023 09:08
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Will reject exit offer. | ||||
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Everyday
Elite |
31-May-2023 07:26
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Sias recommends Golden Energy and Resources shareholders reject exit offerTUE, MAY 30, 2023 - 07:28 PM
UPDATED TUE, MAY 30, 2023 - 10:38 PM
David Gerald, president of Sias, says that the IFA has conflated the two corporate actions of the exit offer and the distribution of Golden Energy Mines shares to the detriment of minority shareholders.
PHOTO: BT FILE
THE Securities Investors Association (Singapore) or Sias, is recommending that Golden Energy and Resources (Gear) minority shareholders reject the exit offer by the controlling shareholders. Minority shareholders have been asked to accept the distribution in-specie of Gear&rsquo s Gem stake and the cash alternative at S$0.792 per Gear share. In an e-mail to Gear&rsquo s board of directors, David Gerald, president of Sias, said that the independent financial adviser (IFA) had conflated the two corporate actions of the exit offer and the distribution of Golden Energy Mines (Gem) shares. This was despite the issue being highlighted as a concern in a press statement by Sias after meeting Gear representatives. Gear&rsquo s offeror, Duchess Avenue &ndash a company linked to the Widjaja family &ndash has offered S$0.181 per share, with the offer linked to the distribution in-specie of Gear&rsquo s Gem stake. The IFA, W Capital Markets, issued a &ldquo fair and reasonable&rdquo opinion on the delisting proposal. Gerald wrote: &ldquo Clearly, SGX RegCo&rsquo s reminder to the IFA regarding the utilisation of appropriate valuation methodologies and the necessity for analysis supported by reasonable grounds and assumptions capable of withstanding scrutiny has seemingly fallen on deaf ears.&rdquo Referencing Monday&rsquo s (May 29) edition of the Mark to Market column in The Business Times, (&ldquo Golden Energy&rsquo s delisting: IFA opinion is faulty&rdquo ), Sias said that it has from the onset cautioned the IFA against conflating the two corporate actions. In the column, senior correspondent Ben Paul had pointed out that the IFA has reduced the value of the Gems distribution in its model by as much as 42 per cent from 6,500 rupiah (S$0.58) to between 3,773 and 4,277 rupiah. |
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fruitfulness
Veteran |
30-May-2023 23:34
Yells: "May the Lord God establish the works of my hands!" |
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There is still time for a revision to the Revised Exit Offer Price of $0.181 for each Offer Share. Will Duchess Avenue Pte Ltd, on behalf of the Widjajas, kindly heed the shareholder dissatisfaction and make a final adjustment (e.g. another 15% raise of total offer of $0.973 to $1.11 per Golden Energy share) before the EGM vote. And mail us a new set of forms containing the revised price. Afterall, the deadline for the form submission is mid Aug 2023. | ||||
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Taksaka
Member |
30-May-2023 23:05
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Sias recommends Golden Energy and Resources shareholders reject exit offer
https://www.businesstimes.com.sg/companies-markets/sias-recommends-golden-energy-and-resources-shareholders-reject-exit-offer |
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Taksaka
Member |
30-May-2023 23:04
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Please reject the offer
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wehuattogether88
Supreme |
29-May-2023 08:54
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Extract From BT :
GOLDEN Energy and Resources (Gear) is scheduled to put its controversial delisting proposal to a shareholder vote on Jun 9. But the opinion of the appointed independent financial adviser (IFA) that the deal is ?fair and reasonable? is faulty. For one thing, the IFA has valued Gear?s stake in its Indonesia-listed thermal coal arm inappropriately in its sum-of-the-parts (SOTP) model. More importantly, the IFA ? a firm called W Capital Markets ? has not provided any analysis on whether the exit offer for Gear (which takes place after its Indonesian arm has been separated) is fair and reasonable. Under the deal, Gear has proposed a distribution in-specie of its 62.5 per cent stake in Indonesia-listed Golden Energy Mines (Gems). Shareholders of Gear can choose to receive 1.3936 Gems shares for every Gear share they hold or a cash consideration of S$0.792 per Gear share ? which prices the entitlement of 1.3936 Gems shares at 6,500 rupiah per Gems share. Gear then proposes to delist itself with an exit offer of S$0.181 per share. The offeror is a Singapore-incorporated company called Duchess Avenue, which is linked to senior members of the Widjaja family. Gear shareholders who opt to receive Gems shares will receive a total effective consideration of S$0.964 per share (based on the market price of Gems shares of 6,425 rupiah when these terms were announced). ?Reality check? necessary Gear has been at pains to present the proposed distribution in-specie of its stake in Gems and subsequent exit offer ? which are inter-conditional ? as a single transaction. In its recent circular, it urged its shareholders to view and evaluate the consideration they stand to receive in its entirety ? and not focus on the exit offer price on a standalone basis. Earlier this year, however, a shareholder of Gear asked the authorities to clarify whether Gear was breaching Singapore?s rules on delistings and exit offers by telling its IFA to opine on whether the proposed distribution in-specie and subsequent exit offer ? when taken together as a single transaction ? are fair and reasonable. The shareholder said the two elements of the deal should not be conflated, and that the IFA ought to provide a view on whether the exit offer itself is fair and reasonable. Responding to this concern, SGX told Gear in a letter dated Feb 24 that it should ensure its IFA?s opinion states not only whether the two elements of the deal when taken together are fair and reasonable, but also whether the all-cash consideration Gear shareholders stand to receive is fair and reasonable. SGX also reminded Gear that its IFA should exercise due care, skill and professional judgement in adopting appropriate valuation methodologies, and that its analysis should be supported by reasonable grounds and assumptions that can withstand scrutiny. On Mar 18, the terms of the deal were sweetened ? with minority shareholders of Gear being offered as much as 15 per cent more for their shares. This was seen as a victory of sorts for investors, and sparked a rally in the stock. The revised terms of the deal still undervalue Gear, though. And, the IFA seems to have determined the deal to be fair and reasonable by ignoring the plainly observable market value of Gear?s stake in Gems. SGX should take another look at this case, in my view. Specifically, it should ask Gear?s IFA to conduct a ?reality check? on its opinion that the whole deal is fair and reasonable by examining if the exit offer of S$0.181 is also fair and reasonable on a standalone basis. |
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camelhump
Senior |
27-May-2023 21:15
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Yes, you are right! I am not submitting.
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fruitfulness
Veteran |
27-May-2023 11:43
Yells: "May the Lord God establish the works of my hands!" |
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One thing for sure, you must not submit any acceptance form before 9 June 2023. If a vast majority submitted forms to accept the cash exit offer of 18.1 cts, there is no possibility of any last minute raising of the cash exit offer. (No matter what, very slim chance of anymore adjustment to the cash exit offer) Vote to accept/pass both the resolutions on the EGM on 9 June, whether doing it live or by proxy. We need to garner 75% (or more) of the total turnout for each resolution.
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fruitfulness
Veteran |
27-May-2023 11:14
Yells: "May the Lord God establish the works of my hands!" |
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I am still holding on to the acceptance forms for trading my shares for 18.1 cts cash exit offer (since the deadline is in Aug 2023). Most importantly, both the Distribution resolution and the Delisting resolution on the 9 Jun EGM must garner more than 75% each from those who turnout to vote. For those holding on to " relatively small" lots and those who do not want to subject themselves to unknown risks, it is wiser to get the 79.2 cts distribution in specie and 18.1 cts cash exit offer. Majority will do this. What is interesting is if I vote for the Delisting resolution (i.e. accepting the cash exit offer of 18.1 cts), and both EGM resolutions passed, but decided later that I want to hold on to what remains of Golden Energy in scrips or certs, and choose not to submit acceptance form or choose to only partially accept the offer, can there be a check back that I voted in such a manner - and insist on me accepting the cash exit offer in the manner I voted at EGM? I think not, the process could be too cumbersome. I shall ask during the live session of the EGM vote, having not submitted any query yesterday, being the deadline for written query submission.
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sweet639
Veteran |
27-May-2023 11:08
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I really do not understand what should I do with this counter.
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TA_Expert
Supreme |
27-May-2023 00:45
Yells: "The World has changed" |
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Looked like many retails are agreed to sell at the offer price. | ||||
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Catrade
Master |
26-May-2023 22:17
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I think v likely after the 2 resolutions hv passed through on 9Jun EGM, the company would make an announcement, to advice shareholders on the 4 options to choose from. Yes, for those who don' t want to surrender Golden shares for 18.1c exit offer dont hv to submit the " acceptance form" . Eventually the company shall update n annouce its delisting result, n for those who choose not to accept the 18.1c Exit offer shall or may be issued new share script or cert.
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fruitfulness
Veteran |
26-May-2023 15:58
Yells: "May the Lord God establish the works of my hands!" |
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In the coming June 9 EGM, we are to vote to approve the Distribution Resolution and the Delisting Resolution. I wonder how the Delisting Resolution would be phrased : to accept the exit offer of 18.1 cents? Even when we approve these two resolutions, and we do not submit the acceptance form to trade our shares for the exit offer of 18.1 cents, it means they will hand us the certs when they delist Golden.
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TA_Expert
Supreme |
24-May-2023 20:17
Yells: "The World has changed" |
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The problem with Singapore retails is that they are too gudible by these big sharks. In Western world, this kind of offer won' t be tabulated. The investors have a lot rights and powers.
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wehuattogether88
Supreme |
23-May-2023 14:15
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If SGX interfere, Widjaya might do a final revised up on the takeover all cash and part cash part share prices. | ||||
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Catrade
Master |
22-May-2023 13:46
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It?s a little complex! There r 2 parts to this deal, (the distribution of GEMS shares or cash of 79.2c and then the Exit offer of the rest of GEAR assets at 18.1c). Thus total cash amount is (79.2+18.1) = 97.3c. But the EGM resolutions of Distribution & Delisting must first pass through in June 9, then u can decide on one of the 4 options listed on the Takeover document.
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