BREAKING NEWS: Peter Lim makes General Offer for TMC

“Remiser King” Peter Lim, who was made more famous after bidding to buy over Liverpool, has offered $1.75 a share to buy over Dr Cheng Wei Chen and family’s 39.34% stake in Thomson Medical Centre. Dr Cheng is the founder and largest shareholder of TMC. The offer price is at a 62% premium over the last traded price of TMC. The cash offer will be extended to all the remaining issued shares and when 50% or more of the remaining shares are agreeable to be sold, the shareholders will get $1750 per lot. Owners of TMC will receive a offer letter no earlier than 14 days and no later than 21 days.

I believe Peter Lim has been eyeing TMC for some time and with the stellar FY2010 performance (I will be analysing FY2010 results in another post), it gives him added impetus to be the largest shareholder of TMC. At $1.75, TMC P/E will be at 32.3. Current P/E is at 19.9. Peter Lim might even buy over the whole company and de-list TMC. I’m actually not willing to let go of TMC, even at $1.75, as I feel that it has potential to grow even further. But then again, if Peter Lim decides to buy over the whole company, I would have no choice but to sell my stake. Looking forward to Monday opening to see how the market will react to this news. I believe the share price of TMC will skyrocket on Monday.

Source: http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_15B84C10877ACE69482577CB003FD162/$file/Media_Release_Peter_Lim_makes_general_offer_for_Thomson_Medical_Centre_Limited.pdf?openelement

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7 thoughts on “BREAKING NEWS: Peter Lim makes General Offer for TMC

  1. Hi FF,

    i think we still have to wait till the acceptance of this deal. but even if it doesn’t go through, its still good for shareholders like us! his willingness to buy this share is already a statement of confidence in TMC itself. (:

    Hi MW,

    it was nice meeting you!

  2. Hi all,

    I’ve few questions to ask..

    I’m also vested in Thomson Medical.

    1) Will the share price maintain at around $1.75 or higher if I continue to hold till I get the dividend and bonus 1 for 10? I don’t think Peter Lim is buying 100%.

    2) The share price will go up on Monday for sure. Will this go on for next few days or only a Monday rally?

    3) Will you keep the share till the whole saga end and settle for the price then or sell at any high price now?

    4) Lastly, any chance the share price will drop back to $1.10 – $.160 after the whole saga if I continue to hold till dividend & bonus ex date?

    TK

  3. Hi MW,

    Thanks!

    CJ told me he met u yesterday. We were sec sch friends.

    Hi CJ,

    Yes, if the general offer is not accepted by the other shareholders (less than 50% of the other outstanding shares) as stated in my post, we can still get to keep the shares. However, if we keep our shares, what I’m afraid is that will Peter Lim act in the interest of the shareholders like what the management of TMC has been doing?

    Hi learnington76,

    Thanks for visiting my blog!

    Answers to your questions:

    1) Peter Lim might go on to buy out the whole company and even de-list it. We don’t know what his intentions are. If he buys 50% or more of the company before XD, I think we will still be entitled to dividends. Refer to Page 2 of http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_15B84C10877ACE69482577CB003FD162/$file/MGOAnnouncement_291010.pdf?openelement. If he buys 50% or more of the company after XD, the dividends will be deducted from the offer price.

    2) No one knows for sure if the rally will continue for a few more days. We can only predict.

    3) I’m still deciding whether to accept the offer or not as I see potential in TMC to grow even further. Having said this, if Peter Lim decides to buy whole company and de-list it, I would have to sell my stake. If one holds a stake in a private company, he/she has to go to a lawyer to sell the stake in the future. It’s more cumbersome. I will just wait and see for the next 2 weeks how this pans out as the offer letter will only be sent 14 days later.

    4) Like my no. 2 point, no one can accurately predict the market 100%. But my guess is that the price won’t come back to current range.

  4. Thanks for sharing, financiallyfreenow, it’s very insightful. I have vested interest in TMC for the long run.

    I’m thinking that the best course of action for shareholders like myself would be to reject the general offer due in least two weeks time. If however the general offer gets accepted by the majority, we will still be entitled to the buyout offer of 1.75 anyway. What do you think?

    Personally I think it would only serve Peter Lim’s own best interest if he continues to drive TMC towards a profitable direction moving on, so I beg to differ in the concerns that PL will not act in the interest of shareholders.

    • Hi huandamian,

      Thanks for visiting!

      What you said might be a good plan.

      Peter Lim is a long-term investor from what I have read in forums and website. What concerns me is will the current management team stay amongst all the uncertainties and not having any more share of the company they are working for.

  5. Hi FF,

    I think the word “management” is rather vague. Are we talking about the board of directors, or are we talking about their key management?

    Like I’ve mentioned the other day, I think I’d personally more cautious of PL handling TMC than current executive management team not working to the maximum capability.

    I’ve also stated in my post that TMC’s Dr Cheng’s flesh and blood as he built it from scratch. Unlike Dr Cheng, PL’s probably only for a cash cow and realise that TMC has suited his sets of criteria.

    If PL owns more than 50% shares, I think it is likely that there would be changes to the members of board of directors. Till then, another set of analysis could only determine if TMC is still worth holding.

    However for the key management team, it’s a whole total issue. There shouldn’t be much changes in the mentality of key management and we can rest assure they will still execute their job at its best as they do not hold substantial amount of shares in TMC. (:

    Regards,
    cj

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