IPC: Oei Hong Leong’s offer is unlikely to be successful

Once again, Oei Hong Leong made a mandatory conditional offer to buy up IPC after acquiring more than 30% of the company shares. Following the offer, the price of IPC was bid up to 3 year high to $0.205 before dropping back to a current price of $0.175. Personally, I had taken advantage of the drastic price advance to sell some of my holdings and had bought back a partial tranche. (The purpose of buying a partial tranche is to serve as an insurance in case the share price suddenly turn upwards again.) Perhaps, I will probably trigger buying up another tranche when the offer lapsed after 15 May 2015 or when the stock goes XD.

With the PE at 5.05 and a net asset value of 24.4 cents, the offer is certainly too low to garner sufficient interest. The offeror probably made this offer to satisfy acquisition requirement. After all, once after the failed bid, the offerer cannot make a bid for the next 12 months. With the property price expecting to be gain better valuation, and the prospects of better earnings ahead, I personally think that the offer lacks conviction.

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(Brennen Pak has been a stock investor for more than 25 years. He is the Principal Trainer of BP Wealth Learning Centre LLP. He is the author of the book “Building Wealth Together Through Stocks.”)

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