SMB United -- takeover bid by Boer

[Orpheus]

Accordingly, it was an unsolicited bid by Boer. It is a tricky situation here as offer price is unattractive to SMB's major shareholders. But the public shareholders (largely small holders) may still agree to throw in their holdings. Boer's own share price has been under serious selling pressure in recent months on the back of earnings slowdown and China railway accident. SMB may have been on Boer's M&A radar and timing of the offer may help them erase some negatives. Boer is valueing SMB @ EV/EBITDA of 5.3x (6.2x EBIT) against their own corresponding of 4.2x ( 4.6x), thus there maybe little room for them to improve offer price. Not ruling out the possibility of a "white knight" in aid of SMB's defence. SMB is a classic case for private equity fund - undervalued, no liquidity, ageing management, steady free cash flow, good balance sheet. Time is running out, though.