Thursday, May 15, 2014

**OFFERING SUMMARY**
Company                   Eco World Development Group Bhd
 Bloomberg TK              ECW MK
Vendors                   Former Focal Aims Holdings Berhad   (now Eco World) shareholders exiting
                          post-corporate announcements  (clean-up block)
Listing                   Bursa Malaysia Securities Berhad
SEDOL                     6773737 MY
ISIN                      MYL8206OO004
Offering mode             Accelerated Bookbuild. This is an   undocumented trade.
Offer size                Up to 24,597,235 existing Eco World  shares (approx 9.7% of issued shares)
Price range               RM4.20 to RM4.45 per share
Discount                  6.3% to 11.6% to Closing Price
Closing Price             RM4.75 on 14 May 2014
1-day VWAP                RM4.7735 as at 14 May 2014
Distribution              Reg S
Brokerage                 75 bps, standard market charges
Sole Bookrunner           CIMB
~ strong interest from local investors
~ accelerated bookbuild. The book will close at the discretion of CIMB
~ shares are entitled to rights issue
~ trade date is tomorrow, May 15
**TIMETABLE**
Books open                Now HKT, 14 May 2014
Books close               Tonight HKT, 14 May 2014
Pricing and allocation    15 May 2014
Trade date                15 May 2014
Settlement                20 May 2014
**SOLE BOOKRUN REG S ACCELERATED BOOKBUILD**
**SOLE BOOKRUNNER -- CIMB**

WHY THIS HAS TO BE THE SHARPEST CORPORATE MOVE

January 2014 - Liew Tian Xiong, who offered to buy 164.77 million shares, or 65.05 per cent, of the company for RM230.68 million cash (at RM1.40 a share).

January - present: Can anyone make a smart guess as to who has been buying up shares from RM1.00 to above RM5.00???

Looking at the flow of news, maybe the Liews father and son, could possibly have more than 65% of the paid up of the company, maybe not, doesn't matter, their cost is very low (1.40) ... if they bought a bit more in other names it will only bring up their average price by a very small quantum.  When you have 65%, it takes very little to soak up free float. When there is little free float, it is very easy to put up whatever share price you want. Why stop at 4.00, why not 7.00? (Well, gotta leave some crumbs on the table, cannot make everything la).

Allowing the original stakeholders of Focal Aims to sell above 4.20 ... wow, what a bonanza for them ... and great strategy to get them NOT to dispose their shares at 1.40 but rewarding them with multi bagger returns within 9 months. What a sales pitch - sell me 65% of your company at 1.40, I will make sure you can sell the rest of your shares above 4.00, or you can ride all the way with me!!!

Now, the Liews controls Ecoworld the listed vehicle. The listed vehicle will buy Liew's private landbank company for RM3.8bn, in cash and new shares I believe. To do that, Ecoworld will be doing a 1-for-1 share split, 1-for-2 rights and a 4 for 5 free warrant. Here is the BAIT ... share split is bonus really and free warrant is always good. Beautifully executed, so much so the rights is a non issue. 

So much so that not many will notice or question why these original Focal shareholders DO NOT WANT TO subscribe to the rights???

So the company is raising tons of cash to pay senior Liew. The brilliant part is that he gets to monetise his landbank which has been held for a long time. He gets tons of cash, and even more shares. Since he is already a 65% shareholder of Ecoworld, he will also be paying for the rights, but his cost of shares is only 1.40 while the capital issues are being made when share price is above 4.00.

IF and I am saying IF ... if Liew bought another 10% at prices between 2.00 to 3.00 ... he could easily sell it above 4.50 and actually pay for the rights with trading gains. I am not saying that it happened, it could ... if it was me, I WOULD!!!

Funny how CIMB can come out with an RM8.00 report weeks before there was to be a placement of EXISTING SHARES above 4.20. Hmmm ... aren't there rules that say that as lead bookrunner, maybe its not so "nice or deemed proper" to be issuing a research report on same stock??!! Or there is nothing wrong with that? OK, so I assume that the research arm REALLY does not know what the IB side is doing ... I guess, thats the way of the world.

http://malaysiafinance.blogspot.com/2014/05/sharpest-corporate-move-id-seen-for.html