Leader Universal Holdings received a proposal for the sale of its entire assets and liabilities to a company owned by the founder family. Cash would be distributed back to shareholders through a special dividend and capital reduction payment. Usually these deals in Malaysia with the sale of the entire assets and liabilities take a long time to complete as once the deal is confirmed, they still need to get court approval to distribute back the capital to shareholders. From experience, the speed definitely depends on the size and motivation of the deal. Ranges between 6 months - 12 months. The deal was announced back in October 2011.
It is expected that the deal will be completed in the third quarter of 2012. The offer price is $1.10
The current price is $1.05. This implies a premium of 4.76%.
Assuming the completion date is the end of September 2012, the annualized return is still 8.5%. Lever it up once and you'll get returns of 17%.
This seems to be a low risk deal and will get more attractive with time if it stays at $1.05.
I would add this deal to my book.
No comments:
Post a Comment