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The new SSH Datuk Cheah bought over the controlling stake at rm5.80, with book value~rm3.00 per share when it launched the offer (FY23 end). But since the company has zero debt and ~45% of equity in cash/liquid assets, the enterprise value per share would have been 5.80 - (0.45*3) ~ rm4.45.
So we could break down the rm3.00 as below:
(A) rm1.35: cash/liquid inv (45% of equity)
(B) rm1.65: hard assets and others (55% of equity)
In essence, Datuk Cheah is paying rm4.45 for (B) which is stated as rm1.65 as accounting value - a 170% premium.
A listing shell (for Baskin Robbins Msia/Spore) is not going to cost this much. I am not familiar with Bursa Msia companies but I suspect there are readily available companies for Datuk Cheah to choose for RTO (reverse take over).
Datuk Cheah will not pay 170% premium on book value (on its hard and intangible assets) unless they is plenty of hidden value (distribution network, depreciated machinery that still have long useful lives) OR he believes they can "turnaround" it to fulfill its potential. I think Mr Bursa Market is paying for that?
So we could break down the rm3.00 as below:
(A) rm1.35: cash/liquid inv (45% of equity)
(B) rm1.65: hard assets and others (55% of equity)
In essence, Datuk Cheah is paying rm4.45 for (B) which is stated as rm1.65 as accounting value - a 170% premium.
A listing shell (for Baskin Robbins Msia/Spore) is not going to cost this much. I am not familiar with Bursa Msia companies but I suspect there are readily available companies for Datuk Cheah to choose for RTO (reverse take over).
Datuk Cheah will not pay 170% premium on book value (on its hard and intangible assets) unless they is plenty of hidden value (distribution network, depreciated machinery that still have long useful lives) OR he believes they can "turnaround" it to fulfill its potential. I think Mr Bursa Market is paying for that?