Temasek Unit Offers to Buy Olam in $4.2 Billion Cash Deal

[LiuDeHua]

A Temasek Holdings Pte unit offered to buy Olam International Ltd. (OLAM) in a bid that values the commodity trader at S$5.3 billion ($4.2 billion), about 16 months after it helped stave off an attack by short-seller Carson Block.

Breedens Investments Pte is offering S$2.23 cash per share, the Singapore-based company said today in a statement, a 12 percent premium to Olam’s last closing price of S$1.995. It is also making an offer for Olam’s outstanding bonds and warrants.

Temasek, Singapore’s state-owned investment firm, became the largest investor in Olam, one of the world’s top three coffee and rice traders, after concerns raised by short-seller Block in November 2012 caused the stock to plummet. The offer has the support of Olam’s founding family and management, with some agreeing to sell a proportion of their shares to the bidding group.

“Temasek is already a large holder of Olam so they probably know the business better than everybody else,” said Robert Aspin, the Singapore-based head of equity investment strategy at Standard Chartered Plc. “The fact that they are willing to pay a premium is indicative of the value that they see in the underlying business.”

Olam has rallied 30 percent this year through March 12 in Singapore, compared with a 2.2 percent decline in the benchmark Straits Times Index. The stock, which closed as low as S$1.395 after Block’s attack, reached a near 17-month high of S$1.995 on March 12.

An employee walks past the logo of Temasek Holdings Pte at the company's headquarters in Singapore.

 

Group Support

Breedens also has an agreement with a group including Kewalram Singapore Ltd., Olam’s founding family shareholder, and 10 Olam executives including Chief Executive Officer Sunny Verghese to not tender their shares until six months after the offer closes, Breedens said in a statement. All totaled they hold 52.5 percent ofOlam shares.

Kewalram and three members of key management have agreed to sell a 5.6 percent stake in Olam in acceptance of the offer.

Credit Suisse Group AG, DBS Group Holdings Ltd., and United Overseas Bank Ltd. advised Breedens.

Breedens doesn’t plan to make any major changes to Olam’s businesses or terminate employees. It also intends to keep Olam as a listed company, unless the minimum float requirements aren’t met, it said.

“We believe a successful offer will provide Olam with a stronger and more stable shareholder base to support Olam’s strategy and business model for the long term,” Breedens Director David Heng said in the statement. “We have invested in Olam over the years, and share a common investment philosophy to invest and build for the long term.”

 

Block’s Bet

Block said in November 2012 he was betting against Olam because he questioned the trader’s accounting methods and asset purchases, pushing the stock to a more than three-year low in December 2012. Olam rejected the assertions by Block and his research firm Muddy Waters LLC.

Block today declined to comment.

“Olam has been oversold following the issues raised by Muddy Waters and has bounced back strongly as the company addressed those concerns,” Alan Richardson, a Hong Kong-based money manager at Samsung Asset Management, said by phone before the announcement.

As well as adding Olam shares after the Block allegations, Temasek also backed a $750 million bond sale by the commodity trader. Olam said in December 2012 it planned to sell bonds and warrants to address any “lingering doubts” about its finances. The investment firm agreed at the time to buy any rights not taken up by other investors.

Olam is a supplier and processor of agricultural products and food ingredients across 16 platforms in 65 countries.

Temasek holds 24.6 percent of Olam through its units Breedens and Aranda Investments Pte, and the founding family has a 20.2 percent stake, according to today’s statement.

[Thaiyotakamli]

One word, Cash

[Little_prince]

hong gan. whatever temesek touches will chui

[Sabian]

hong gan. whatever temesek touches will chui

 

 

Temasek is major shareholder in SingPost leh...then SingPost how?

[Celicar]

I don't understand. Make an offer but yet plan to keep it listed because there may still be minimum float? So they think their offer maybe won't be taken up well?

 

Anyway, I shudder at the statement that "The offer has the support of Olam’s founding family and management, with some agreeing to sell a proportion of their shares to the bidding group." Those who are even more in the know than Temasek thinks it is a good deal to sell out at the offer price. Be afraid. Be very afraid. This is going to be a very very very........... very long term investment.

 

A Temasek Holdings Pte unit offered to buy Olam International Ltd. (OLAM) in a bid that values the commodity trader at S$5.3 billion ($4.2 billion), about 16 months after it helped stave off an attack by short-seller Carson Block.

.....

It also intends to keep Olam as a listed company, unless the minimum float requirements aren’t met, it said.

 

[Little_prince]

 

 

Temasek is major shareholder in SingPost leh...then SingPost how?

planning to run road liao. Haha

[Hiphiphoray]

Why cant they just stop gambling!!!!!

 

WHY

 

WHY

 

WHY

[Sabian]

planning to run road liao. Haha

 

Hahaha

 

Actually not all their companies are chui, Temasek got winners too.

 

SingPost is a decent company.

[Wt_know]

isn't olam was in the news about 'accounting' not long ago?

Edited March 14, 2014 by Wt_know

[Little_prince]

isn't olam was in the news about 'accounting' not long ago?

yeah. Muddy water fiasco.

[Kusje]

I don't understand. Make an offer but yet plan to keep it listed because there may still be minimum float? So they think their offer maybe won't be taken up well?

 

Anyway, I shudder at the statement that "The offer has the support of Olam’s founding family and management, with some agreeing to sell a proportion of their shares to the bidding group." Those who are even more in the know than Temasek thinks it is a good deal to sell out at the offer price. Be afraid. Be very afraid. This is going to be a very very very........... very long term investment.

 

 

Aren't most acquisitions a sale from those even more in the know than the buyer?

[Celicar]

Not necessarily. Some cornerstone investors are very passive and just park their money there. Man-in-the-street investors even more no need to say. When buying from those who manage the company, when the premium is so low and yet they willing to sell, well, form your own conclusions.

 

 

Aren't most acquisitions a sale from those even more in the know than the buyer?

 

[Kusje]

Not necessarily. Some cornerstone investors are very passive and just park their money there. Man-in-the-street investors even more no need to say. When buying from those who manage the company, when the premium is so low and yet they willing to sell, well, form your own conclusions.

 

 

 

You can't compare the premium from when the stock was halted. If you look at the share price, you'll see that the price has been bouncing around 1.4 to 1.6 from Sept 2014 to Feb 2014 when it suddenly shot up.

 

I don't follow the stock but couldn't the sharp increase be due to insiders leaks? If so, the premium should be calculated from 1.6 instead of when the stock was halted.

[Celicar]

Precisely. Doesn't this suggest that those who will be selling thinks that they are getting a big premiun, despite 'officially' the premium being just in the low teens compare to last done price before the news broke cover?

You can't compare the premium from when the stock was halted. If you look at the share price, you'll see that the price has been bouncing around 1.4 to 1.6 from Sept 2014 to Feb 2014 when it suddenly shot up.

 

I don't follow the stock but couldn't the sharp increase be due to insiders leaks? If so, the premium should be calculated from 1.6 instead of when the stock was halted.

 

[Neost]

hong gan. whatever temesek touches will chui

Bro, I kee chui kee kar and agreed with u on this one.

 

The ah nei boss of olam will be happily retired in a remote island in Indian Ocean slipping teh Tarik

[TJX]

No choice bro. They need to throw more good money after bad coz cannot let the co collapse now.. If not they will look bad.. Maybe if it goes down a few yrs later, the ppl up there already not ard liaoz.. No need to be responsible..

 

But U all must understand the govt is trying to 'help' us coz when they lose billions they can still pay us min 2.5% in our CPF. We must be grateful they are taking high risk for no returns. But if can. Pls dun help us anymore.. Tolong tolong.. Terima kasih.

[Albeniz]

Why cant they just stop gambling!!!!!

 

WHY

 

WHY

 

WHY

 

我答应你这是最后一把， 我一定会统统还给你的。

 

I promise you this will be my last attempt, I will return the piggy bank to you after i have won.

[Little_prince]

 

我答应你这是最后一把， 我一定会统统还给你的。

 

I promise you this will be my last attempt, I will return the piggy bank to you after i have won.

knn. at least last time Ong teng cheong will hug our piggy bank tight tight.

 

pek moh will help take hammer to open the piggy bank