lks_5291, I fully agree that RNAV valuation is the most appropriate method in evaluating a property counter.

The offer on MulphaLand has been rated "Not Fair n Not Reasonable" by independent advisor. Comparing to MulphaLand, Hunza is even more undervalued n KTT's offer price is very much lower comparing to the offer for MulphaLand.

In order to make some of you understand better on KTT's offer on Hunza, I give the most simplified scenerio that Hunza as a company has only1 asset (a linked house in KL).
1 unit of linked house - bought in 2004 for RM350,000.00 (hence NTA RM3.50)
House value in 2015 - RM750,000.00 (hence RNAV RM7.50)
KTT wants to buy at RM250,000.00 (hence offer price RM2.50)

Do you want to sell your house that worth RM750,000.00 to KTT at RM250,000.00? Definitely, nobody will sell to him at RM250,000.00. KTT has to raise his offer price if he is keen. I also hope that someones with financial muscles will emerge n collect this undervalued counter just like what is happening to MulphaLand now.

Today, MulphaLand closed at RM0.68, much higher than the offer price RM0.497.

Just hope that the board of directors of the 2 organisations will act and safeguard the interest of their members. They are not private firms, sometimes they may neglect their members' interests which are also our interests.

Thks, lks_5291. After looking at the SCR carefully, two possibilities that I can give.

1) The SCR is carried out at company level. That means, the payments will be paid by Hunza to the shareholders for the shares cancelled. Probably, KTT himself do not hv enough money (abt RM230mil) to carry out the privatisation. Hunza as a company is able to do that by getting loans from banks with pledging of its assets.

2) The SCR needs only 75% votes by the shareholders in the EGM for approval. I think they can even partially cancel the minority shareholders' shares. Which means, if only 60% of the minority shareholders accept the offer, Hunza can just cancel that 60% and the remaining 40% will remain as shareholders.

Why is KTT is proposing Selective Capital Reduction (SCR) n Repayment Exercise? Why is it not a straight forward general offer? Any of the members here can inform me abt this?

Please read the latest "The Edge" issue, Pg. 10

"HUNZA WORTH MULTIPLE TIMES PRIVATISATION OFFER'

OngLiao99, I will be very happy if there is a "The Edge" coverage on Hunza this weekend. Are u sure there will be one?

JT Yeo, I agree with your method of the valuation of the mall to certain extent but not fully. This method of basing on yield (for example 6% yield per year) to value a mall is suitable for matured shopping malls like Sunway Pyramid, Pavillion or Queensbay Mall.
For Gurney Paragon, it is a new mall (1 yr n 9 months old) and is not matured yet. Usually, the rental is lower for new mall to attract tenants n a lot is spent on advertising. After 3 to 4 yrs, the mall will mature n receive appropriate rental incomes when the tenants renew their leasing agreements. The yield will be normalised in another 1 to 2 yrs time from now.
That is the reason I use its next door Gurney Plaza valuation to value the mall. I trust this is a fair method bcos the mall is as good if not better than Gurney Plaza.
The valuation of Gurney Plaza's RM1,295mil for the 887,764 sq. ft. mall is from the CapitalMalls Malaysia Trust 2014 annual report. I hv a very strong base to support my estimation.

JT Yeo, u r right only to certain extent. That depends on how u view the property, Hunza in this case.

Let us use an example, u we own a linked house that worth RM1mil. That house can only be rented out at RM2,000.00 per month. Ur annual gross income is only RM24,000 and gross yield is only 2.4%. Ironically, the house still worth RM1mil irrespect of the yield generated. We can not say that we want 10% yield (abt gross PE 10) and based on 10% gross yield, I value the house at only RM100,000.00. This is real estate. It is not just a business model. Many ppl will still keep the house even it is low yield bcos the house will appreciate further in long terms. They don't make from the rental but they make from the capital appreciation.

Coming back to Hunza, we as minority shareholders do not know the bad intention of the major shareholders in advance. Many of us are value investors (small or big) who bought the shares bcos it was undervalued. Many of us saw the good prospects of Gurney Paragon n invested in Hunza before or while Gurney Paragon was under construction. Now, the trees hv bare fruits, the major shareholders want to privatize the company. They hv to offer a price that is reasonable say RM5.00/share. If we know that the major shareholder hv this bad intention, I don't think any of us would hv invested in Hunza in the first place. The shareholders had contributed n assisted Hunza in building Gurney Paragon n building up the landbanks. Off course, we recognised n ackowledged the hardwork of the directors management. If the major shareholders do not intend to share the friuits with the other shareholders, they should hv privatized the company b4 Gurney Paragon was constructed or they should hv not listed Hunza in the first place.

Hunza n some other property counters are full of undervalued properties. Owning the shares of these counters are like owning properties. Some ppl bought into a property and keep for 10-20 yrs bcos they know that they are richer bcos the properties appreciate many times in long terms. I am sure that one day (3yrs, 5yrs, 10yrs or 20 yrs), the true value of these properties will be realised.

I am waiting for Lembaga Tabung Haji's n Yayasan Bumiputra's response n announcements on their stands on this privatization offer. They hv to protect the interests of their members, contributors n shareholders. These 2 organisations hv all the professionals (analysts, accountants, economists n fund managers) to analyse Hunza n the offer price. The members n contributors who understand the situations will scrutinise the two organisations' decisions n make sure that they protect the interests of the organisations.

Dear minority shareholders,

Let us look at one of the Hunza properties - Gurney Paragon
We use its next door shopping mall Gurney Plaza as a benchmark.

From CapitalMalls Malaysia Trust 2014 Annual Report.

Gurney Plaza (CapitalMalls Malaysia Trust)
Net Lettable Area : 887,764 sq. ft., Independent valuation : RM1,295mil.
Value/ sq. ft. = RM1,458.72

Gurney Paragon (Hunza)
Net Lettable Area : 720,000 sq. ft.
Value = 720,000xRM1,458.72 = RM1,050.28mil
Hunza Tower
Net Lettable Area : 100,000 sq. ft.
Value = 100,000xRM1,000.00 = RM 100mil
Total Value of Gurney Paragon = RM1,150,28mil
Total no. of Hunza Shares in Market 225,085,440 shares
(From Khor Teng Tong Holdings Sdn. Bhd. Offer Letter)
Value/share = RM5.11/share

Bayan Baru Development Land measuring 42.3acres.
The current value/sq.ft. of the land is RM 300.00/sq. ft.
This piece of land worth RM552.78mil
Value/Share = RM2.46/share

Shareholders, just these 2 prime properties,
Hunza already worth RM7.57/share. The offer price of RM2.50 is totally unfair.

There are other valuable assets
400 acres in Bandar Putra Bertam, Seberang Perai
9.8 acres in Alila 2, Tanjung Bungah
6 acres near to Mont Kiara (KL)
36.9 acres near Auto City, Juru, Seberang Perai
500 acres in Sungai Petani (Kedah)

They will adjust the price upward only when the sensed that the shareholders do not agree with the price offered. Upmost importatnt is the minority shareholders must be informed abt the actual value of the company so that they can make the right decision. They can decide whether the offer price of RM2.50 is fair or not comparing to the RNAV of RM7.50 a share.

Complaints must be made to SC n Minority Watchdog groups. More complaints are welcome so that they have the reasons to look into this matter.

They pressed down the share price for the last few months so that their offer RM2.50 is abt 40 sen higher than last trading price. To make it looks attractive.

Talking abt the warrants, the expiry date of the warrants was 2/3/2015 which was 2 weeks ago. Those who did not had the money to convert would had to sell their warrants to the market at low price n KTT n their ppl bought a lot of that.
Now, 2 weeks later, after they had sapu what they can be sapu at a cheap price from the market, they announced this.

lks_5291, I totally agree with u.

Lembaga Tabung Haji n Yayasan Bumiputera are funds n run by appointed personnels. Hopefully the appointed personnels will act for the benefits and the rights of the funds. I also hope that they will act like if they are investing with their own money.

The major shareholders, Khor Teng Tong n related ppl had already planned this for at least 1 year. They had instructed Hunza to buy back its own shares to the maximum allowed by authority which is 10% by using the cash of the company. that 10% treasury shares (22,508,544 shares) worth RM47,267,942.40.
When he takes the company private, that 10% is actually owned by him.

RNAV is the actual value of the company that is calculated based on the current market asset prices minus all the liabilities of the company. When they want to take the company private, one of the reason is the current share price is much lower than RNAV and they will gain a lot by taking the company private.
However, the minorities should only accept a price that is reasonable. What price is reasonable? I think RM5.00 is reasonable which is 33% lower than the actual worth of the company (RM7.50).

Comments On Hunza

The controlling major shareholders know the actual value of the company very well. They know that it worth more than RM7.50 a share. That is the reason they want to take it private at RM2.50.
It is like buying your terraced house worth RM750,000.00 at the price of RM250,000.00. Do you want to sell your house at RM250,000.00?

Their intention is to relist the company again few years later at RM7.50 a share and they will be 3 times richer. We as small shareholders are in the dark and fortunately thanks to the analysts' research papers n informations that are available from the annual reports and internet, we can find out the actual worth of the company.

I will not accept the offer price of RM2.50. I will be present to cast my vote.

Comments On Hunza

The controlling major shareholders know the actual value of the company very well. They know that it worth more than RM7.50 a share. That is the reason they want to take it private at RM2.50.
It is like buying your terraced house worth RM750,000.00 at the price of RM250,000.00. Do you want to sell your house at RM250,000.00?

Their intention is to relist the company again few years later at RM7.50 a share and they will be 3 times richer. We as small shareholders are in the dark and fortunately thanks to the analysts' research papers n informations that are available from the annual reports and internet, we can find out the actual worth of the company.

I will not accept the offer price of RM2.50. I will be present to cast my vote.

Another tycoon is trying to take Hunza private. Offer price is RM 2.50 for a company that is worth (RNAV) RM7.50 per share. Minorities must say no to this kind of bully, taking advantage of small shareholders.

Comments On Hunza

The NTA of RM3.50 per share are based on the prices when the properties were bought years ago which was much lower than the current prices. The properties had appreciated substantially especially since 2009.

Based on the research by Alliance Bank analyst, Bernard Ching dated 15/5/13, the RNAV was RM6.55 per share in May 2013.

Please go to Bursa Malaysia website, type Hunza and u can find the research report.

The current NTA should be even higher than 6.55/share bcos the land prices and Gurney Paragon has appreciated a lot since the report was written. The current NTA should be more than RM7.50/share.

Furthermore, 10% of the share has already been bought back by Hunza, the NTA should be even higher.

Comment On Hunza

The NTA of RM3.50 per share are based on the prices when the properties were bought years ago which was much lower than the current prices. The properties had appreciated substantially especially since 2009.

Based on the research by Alliance Bank analyst, Bernard Ching dated 15/5/13, the RNAV was RM6.55 per share in May 2013.

Please go to Bursa Malaysia website, type Hunza and u can find the research report.

The current NTA should be even higher than 6.55/share bcos the land prices and Gurney Paragon has appreciated a lot since the report was written. The current NTA should be more than RM7.50/share.

Furthermore, 10% of the share has already been bought back by Hunza, the NTA should be even higher.

Another tycoon is trying to take Hunza private. Offer price is RM 2.50 for a company that is worth (RNAV) RM7.50 per share. Minorities must say no to this kind of bully, taking advantage of small shareholders. If u r interested, pls go to comments on Hunza in i3.

Another tycoon is trying to take Hunza private. Offer price is RM 2.50 for a company that is worth (RNAV) RM7.50 per share. Minorities must say no to this kind of bully, taking advantage of small shareholders. If u r interested, pls go to comments on Hunza in i3.

The controlling major shareholders know the actual value of the company very well. They know that it worth more than RM7.50 a share. That is the reason they want to take it private at RM2.50.
It is like buying your terraced house worth RM750,000.00 at the price of RM250,000.00. Do you want to sell your house at RM250,000.00?

Their intention is to relist the company again few years later at RM7.50 a share and they will be 3 times richer. We as small shareholders are in the dark and fortunately thanks to the analysts' research papers n informations that are available from the annual reports and internet, we can find out the actual worth of the company.

I will not accept the offer price of RM2.50. I will be present to cast my vote.

The NTA of RM3.50 per share are based on the prices when the properties were bought years ago which was much lower than the current prices. The properties had appreciated substantially especially since 2009.

Based on the research by Alliance Bank analyst, Bernard Ching dated 15/5/13, the RNAV was RM6.55 per share in May 2013.

Please go to Bursa Malaysia website, type Hunza and u can find the research report.

The current NTA should be even higher than 6.55/share bcos the land prices and Gurney Paragon has appreciated a lot since the report was written. The current NTA should be more than RM7.50/share.

Furthermore, 10% of the share has already been bought back by Hunza, the NTA should be even higher.

Speechless, I will also hold on to my shares. Will not sell at this unfair price.

If we consider the present values of the lands n properties that are not revaluated, the revised book value of PJD should be more than RM4.00/share. Their offer at RM1.60 is really unfair. I will not take up the offer.

Icon888, agreed with u. But in the situation that he is unable to get 90% or more, the delisting may not happened. However, how is OSKP going to comply to 25% shareholding spread requirement?

OSKP Revised Net Value RM5.25/share.
Annualised Earnings @ RM0.42/share that may sustained price of RM4.20 at PE 10X.

OLH wants to swap at RM2.00. We lose big, OLH lose massive.

Icon8888, good to know that we hv the same views. However, how do u think the situation will develop? For example, if the minority shareholders (say 15% or 20% total shareholdings) did not take up the offer. What will OLH do?

I did some analysis n found that OLH is on the losing side in this deal just like u n me. Atria with net lettable area of 500,000 sq ft will be opened within these 2 months and it is worth more than RM550mil (comparatively, Tropicana City's valuation is RM1,100 per sq ft). That works out to be about RM2.25/share just for Atria alone. Other revised net value that reflects the current values of development land like Cyberjaya, Sungai Petani, Shah Alam including other assets and liabilities are valued at about RM3.00/share. Therefore, the actual Revised Net Value of OSKP is worth RM5.25/share.

On the other hand, the land and properties of OSK Holdings had just been revalued in Dec 12 or Dec 13 which means the net book values has already reflected the present values. Taking into consideration of its holdings in RHB Capital, the revised net value of OSKH is abt RM2.65/share.

By this calculation, each share of OSKP is worth 2 shares of OSKH. It should be each OSKP share is exchanged with 2 shares of OSKH.

OLH holds 73% of OSKP, therefore it should benefits him more if the share swap is done based on the actual revised book values of both companies.