The Dawn Raid Episode 2 (PUNCAK)

I was talking about the Dawn Raid few days ago and in order to make things clear, I had consulted some of my friends whom works in the advisory firm.

The question was, can hostile take over happen in the case of Puncak Niaga?
NO! This is because to take over a company, it's compulsory to acquire 90% of the remaining shares not own by the party. So if one party holds 43% while another hold 45% which they rejected each others offer hence the take over will not be successful.

But, the case will be different! As 1 of the major shareholder, they can throw the management and the board! As a result, they can throw them away and push through the sale of assets! This will need about 50% +1 of the shareholders to agree! (If I'm not mistaken)

As a result of that, there are still chances and reason behind for the Selangor Govt to mop the shares from the market!

Why do they give free Warrant at such timing???
As I said before, this warrant gonna give the major shareholder a tighther grip to the company. But be mindful, If someone exercise the warrant before the deal was done this gonna dilute the earnings  that you are going to get for selling the water assets!

Anyway, the benefit is that the warrant will definitely move higher when the share price rocket up! This will make the shareholders to earn more for selling their warrant in the market! Be mindful, the major shareholder going to earn as well.

Is Puncak Niaga a Good buy right now?????
According to what I saw today, the minutes chart had shows that there are support at the RM2.55 level!
If this going to happen again tomorrow, this means there are ppl supporting it at RM2.55 and it's definitely a good buy at this level!

 

This shows that buying at the RM2.55 level will be a lot safer. 

Still not convince of Puncak?

 Reasons for me to buy back in!
1st  The previous deal offered by the Selangor Govt on February which translate to around RM2.40 per share (Be mindful, this was before the warrant)

2nd If U were to buy it in at RM2.60 which is the closing price today, thats mean you are buying all the assets and business of Puncak at this price. Assuming that the RM2.40 will be remain, thats mean you are paying RM0.20 for Puncak's Oil and Gas Business and some other business too!

3rd Puncak is going to pay their Final Single Tier Dividend of RM0.05 where the ex-date will be on 11/07/2013. As a result, this will lower your cost to RM0.15 for the other business!

4th The 1 free warrant for every 10 existing shares.

So with RM0.15, you can get the O&G business as well as free warrants. Isn't it a value buy?
You may say that it might go down lower, but who knows?

 Rm2.60 now will offer you a chance of potential upside as well as free warrant and 5 cents dividend. Good deal?

On the other hand, I think KPS will be a good bet as well, don't forget that they are 1 of the major holder of the water assets as well! Selling those assets gonna give them good money too! Does that means, bumpers of dividend is on its way? Personally I think thats what it gonna be and thats why I feels like buying it as well. Were supported at the level of Rm1.85 today.

Risk!!!
As u can see, this tussle had been going on for years. Even Tan Sri Khalid wanted to wrap things up before september, but do u think Tan Sri Rozali will be let him walk away so easily? Will it last for another 6 months or even longer? That's the only risk that I see but it will be alright if you don't mind to invest it for long time! 

GOOD LUCK and HUAT AH!

Disclaimer: No information should be concluded as buy or sell, please consult your personal remisier for your personal investment decision. I will not pay for your losses but I don't mind you to buy me good food if U made money by following my Investment Thoughts. Cheers! Huat ah!