A private affair for Wing On
WITH share prices down and only slightly recovering, corporate finance departments are kicking around for something to do.
Companies are loath to attempt issues, and international investors are staying away from anything bearing the 'made in China' label given the current climate So what about the good old fashioned privatisation? A prime candidate which has been talked about for years has been the Wing On Company.
The share currently trades as a huge 60-plus per cent plus discount to Net Asset Value. At Friday's close the shares were trading at $8.60 compared to a NAV of around $22.
Wing On Company has more than $1 billion cash on deposit which would go a long way to covering the estimated $1.2 billion price tag for the outstanding 40 per cent free-float of shares should a general offer be made at around $12 per share by its parent Wing On International.
The parent is cash rich and after the $856 million disposal of its insurance arm last year no fund raising exercise would be required.
The company is reported to have been approached by a number of merchant banks looking for a mandate as financial adviser. Sources indicate the controlling Kwok family is now seriously considering the approaches. A buy-back of the remaining stake is heavily rumoured.
Interestingly, Peregrine has been a regular buyer of the share in recent weeks - albeit in small lots.