frankly i dunno how to judge future prospect of insurance companies as the earning is influenced greatly by investment income and claim amounts where the companies have very little control. LPI revenues seemed flattish but current quarter profit is among the highest in past few years
The management of LPI is a group of old people who spend the rest of their lives sitting in the office, earning high salaries every month, and the stock price has nothing to do with them.
LPI’s 1QFY24 results beat expectations as net claims appeared lower following reversal of past claims provisions, prompting us to raise our FY24F-FY25F earnings by 13%-4%. We see that there could be more intensive competition especially in the fire class insurance segment, but are not overly deterred by LPI’s position, thanks to their backing from a leading bank. We maintain OUTPERFORM call but raise our TP to RM15.00 (from RM14.70) as we roll over our valuations.
left hand right hand only, teh family gave discount to pbb, good for pbb, and lpi minority share holders just eat pop corn only, if really drop to rm9.8 i will load up a tone
My research indicates that no current LPI owners will sell to Public Bank for RM 9.80 a share, which means that the MGO acceptance rate will be very low and that LPI will most likely stay listed once the offer closes.
It appears that Public Bank purposefully set the offer price at RM 9.80 per share in order to discourage current LPI shareholders from selling their shares to Public Bank in order to maintain LPI's listing.
"This price of RM 9.80 was negotiated based on a willing-buyer, willing-seller basis. Additionally, money is not a factor, it's more about realigning our interests," Li Shian, the youngest daughter of the late founder, told the media after the signing ceremony.
Analysts are less optimistic that LPI's remaining shareholders will be enticed to sell their stakes through the mandatory general offer at RM9.80 per share, given the steep discount
as MGO stated it's advisable to take LPi private under PBB as subsidiaries but they insist it to remain public that means LPi will be another PBB tools to raise any means of future funds such as PP , Warrants and etc instead of PBB now They can use LPi muscle to flexing more cash...I believe LPi has no value anymore 😂 selling pressure will continue next week
TA Securities described the acquisition price of RM9.80 per share as reasonable. With a PBV of approximately 1.7x, the offer presents a slight premium compared to recent transactions in Malaysia, where average PBV multiples have been around 1.6x.
It noted that the premium appears justified, given that PBB is acquiring a controlling stake in LPI, which likely provides additional strategic benefits such as greater influence over LPI's operations and synergies within the group.
“However, the offer price represents a notable 23.7% discount to LPI’s 5-day VWAP and a discount to its current PBV of around 2.3x. Given this significant discount, we believe that minority shareholders will unlikely tender their shares under the MGO,” TA said
From MIDF Research. KEY INVESTMENT HIGHLIGHTS • Public Bank acquiring a 44.15% stake in LPI. This will trigger a MGO • Offer price is unattractive – at a discount to current market price • Still fundamentally sound with good dividend yield. Offer price is not a reflection of its fundamentals • Forecasts unchanged • Maintain BUY | Unchanged TP of RM14.52 | based on an unchanged FY25F P/BV of 2.42x
LPI holds some 215 million PBB shares. If PBB holds LPI, these shares cannot be held by LPI and what will happen to that block? Will it be sold to the market or distributed as a dividend-in-specie?We will have 12 months from the date of completion of the proposed acquisition of LPI to address this matter.
It is still premature for us to make a decision on this matter but rest assured, we will explore all possibilities and make a decision at the appropriate time that will not be disruptive to the share price of Public Bank, whilst ensuring the interest of the shareholders of PBB and LPI is protected at all times.
Scenario 1: In the event that LPI chooses to sell 215 million PBB shares to the market, it is expected to record a substantial profit and provide windfall dividends to its shareholders.
Scenario 2, LPI shareholders would receive around 500 free PBB shares for every 1,000 LPI shares if LPI opted to distribute 215 million PBB shares as a dividend-in-specie.
In conclusion, LPI stockholders will profit handsomely in any of the aforementioned scenarios.
@greenshoot public bank shares are yielding about 4% in dividend yield the 215million shares held would bring about $40m in dividend for LPI after selling PBB shares, does it mean that LPI net profit would fall by about $40m?
Yes, I think likely will be given as special dividend after selling public bank shares. But LPI shares would also drop by the same amount after the distribution. Profit for LPI will also drop by the the dividend income they used to receive from holding Public bank shares moving forward. I won't really consider this a windfall gain, because LPI is not selling Public bank share at a premium to the market. Its akin to selling part of the company asset and distributing the proceeds to shareholders. I would prefer if LPI can reinvest the proceeds into a higher yielding business/company so that we see income growth with LPI.
LPI needs to divest PBB stocks to fulfill regulatory obligations so that PBB can take over LPI.
Scenario 1 - LPI to return the funds generated by selling PBB shares to current shareholders through a special dividend, leaving it to them to decide where and how to invest for optimal returns.
Scenario 2 - LPI to utilize the sales proceeds from selling PBB shares to fuel future growth by acquiring other companies.
In the second scenario, the existing LPI investors will certainly benefit more.
The process of acquiring a business is a complicated and frequently long journey that companies undertake to grow their operations or enhance their market standing. From the moment a potential target is first identified, to the completion of due diligence and negotiation, and finally to the integration of the acquired company, every stage presents its own distinct challenges and factors to consider.
LPI will probably focus more on expanding organically than on acquiring other companies.
Be optimistic about Scenario 2, but be ready for Scenario 1.
Wishing you a pleasant day.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Raymond Tiruchelvam
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Posted by Raymond Tiruchelvam > 2024-04-29 14:41 | Report Abuse
wow best qtr results thus far.... breached 6 figure profit for the first time in its history.... time to buy