Source : The Straits Times, Jan 11, 2008
CINEMA group Eng Wah Organisation’s share price shot up by 16.5 cents to 85 cents - an all-time high - on news that its portfolio of properties was up for sale.
The counter went as high as 91 cents during the day.
Eng Wah’s properties could be worth as much as $190 million so, based on the 150 million shares in the market, shareholders could get as much as $1.20 in cash per share if all the cash proceeds were distributed.
The group announced in May that it would buy the business of Japanese pharmaceutical firm Transcutaneous Technologies (TTI) by issuing new shares to TTI shareholders. Existing assets of Eng Wah would be sold off, with practically all of the proceeds going back to the shareholders.
Yesterday, Ms Goh Min Yen, Eng Wah’s managing director, reiterated that the asset disposal had always been part of the deal.
Still, a report unveiling details of the sale of the properties by marketing agent Jones Lang LaSalle breathed life into the counter.
Kim Eng Research calculated that each share’s fair value is $1.70. That means even after the jump to 85 cents, the shares look undervalued.
The assets up for sale are the Toa Payoh Entertainment Centre, Jubilee Theatre at Ang Mo Kio, the former Mandarin Theatre at Kallang Bahru, Empress Theatre at Clementi and the 16th floor of Orchard Towers.
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