Tuesday 12 August 2014

Delloyd's hidden gems to be revalued? (2)

I wrote before about Delloyd Ventures announcing a proposed selective capital reduction and repayment exercise in which minority shareholders will receive RM 4.80 per share.

A back of the envelope calculation (taking into account revalued prices for their plantation land) appears to indicate that the price severely undervalues the true value per share.

Delloyd announced yesterday that the price per share has been increased to RM 5.20 per share.

I guess that makes it slightly more palatable.

The independent adviser for this corporate exercise is Affin Investment Bank.

I would love to see them write something along the lines: "we estimate that the RNAV per share is around RM 15, therefore we find the proposed price not fair and not reasonable".

Will they write that? Although independent advice has been improved significantly, I don't think that will happen.

But I do hope that all the relatively larger assets of Delloyd will be revalued in a proper way. The minority investors are entitled to know that piece of information.

That revaluation might happen, if not, that would be most disappointing.

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