Accordia Golf(AG) offered Accordia Golf Trust (AGT) JPY$63,167 Million (S$780 Million) for all interest of its golf courses, including debts. This amount to 71 cents per share. Initially, myself and the online committees were expecting a delist of 80 cents to a high to 120 cents or more and this feel like a low ball offer. However, the offer is regard to the golf courses and not an offer to buyout the whole trust. We got our hands in a situation of Saizen Reit. I need to reevaluate.
How much is the valuation of the golf course?
The golf courses is valued at JPY$141 Billion in the latest quarter statement. Some have pointed out the JPY$63,167 Million offer is not enough. But the actual value is after deducting debt. The liabilities consist of borrowings, leases, membership deposits and differed taxes. These items are operational incurred debt, which I believe will be buy out together with the golf courses.
Total liabilities are worth JPY$92 Billions*, which make the golf courses worth JPY$49 Billion. So Accordia Golf is paying JPY$14 Billion above valuation for these golf courses.
*I make some adjustment due to the change in accounting
What is left?
The other assets (cash, receivables, other assets) total JPY$7.8 Billion after deducting intangible assets. This is worth 8.7 Singapore cents per share.
Am I right?
I am no accountant. I do not know if the 'debt' includes all liabilities for this case. Such is the difficulty of a retail investor. According to above assumptions.
Actual value = Golf Course + other left over assets
= JPY$49 Billion + JPY$7.8 Billion
= 70 Singapore Cents
Offer Value = Offer price for Golf Course + other left over assets
= JPY$63.167 Billion + JPY$7.8 Billion
= 80 Signgapore Cents
NAV base on latest Quarter = Equity - Intangible/ total shares
= (JPY$66 Billion - JPY$4 Billion) / 1.1 Billion
= 70 Singapore Cents
Hence my assumption of actual value and actual NAV is correct. And the so call low ball offer below NAV is due to the deduction of intangible.
Conclusion
After sounding my displease, thanks to user @dennischins in Investingnote pointing out offer is only for the golf course. The clarification of AGT released today wasn't clear and has cause much confusion. Or rather we retail investor are not familiar to the terms.
Hence, AG actually paid 25.6% above value for the golf courses or a 14.3% premium above fair value in terms of unit price. At 80 Singapore cents valuation, I guess I can't complain as it matches my previous expectations.
However do note in the case of Saizen Reit, they distribute the proceeds soon after divestment but delisted 2 years later. Impatient investor will sold after the distribution.
I may have may a mistake somewhere. Please point out if there is any.
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| EGM for Saizen Reit and distribution of proceed |
Hi, do you have any ideas whether the major shareholder needs an EGM to approve this sale of Golf courses ? And if EGM is necessary, what percentage for a yes vote ? Simple majority or two-third ? Obviously the major shareholder is trying to avoid a general offer. No matter we like the offer price or not, we should have the sufficient power to take charge of the decision. Otherwise it’s unfair. Regards.
ReplyDeleteGoing by saizen, there should be an EGM, most major decision need 1 ba. Regarding %, I do not know. i remember CRT to delist need >90%. similar to challenger. Is there any changes recently. I am not too clear about this.
Deleteanyway it is a sale of assets
DeleteSo sell assets > distrubute proceeds > wait for delist is most likely this way. delist will take a long time