SMRT Corporation Limited - OCBC Investment 2016-09-15: Accept the scheme on 29 Sep

SMRT Corporation Limited - OCBC Investment 2016-09-15: Accept the scheme on 29 Sep SMRT CORPORATION LTD S53.SI

SMRT Corporation Limited - Accept the scheme on 29 Sep

  • SMRT Corporation Limited (SMRT) will be holding two key meetings on the 29 Sep: 
    1. an EGM in relation to the proposed sale of rail operating assets as part of the transition to the new rail financing framework, and 
    2. scheme meeting to seek shareholders’ (excluding Temasek) approval for the S$1.68/share buyout by Temasek (“Scheme Meeting”). 
  • With the meeting date approaching, we reiterate our view to ACCEPT THE OFFER, by approving the scheme arrangement. 
  • We believe the scheme arrangement is a good opportunity for investor to cash out of a company with soft earnings outlook, especially given the high downside risk (-15.4%) from current share price to our fair value estimate of S$1.40
  • All said, we note that there is still the risk of this proposed buyout by Temasek falling through, if the scheme is not approved. Hence, we think it makes sense for investors, who would like to mitigate this risk, to sell part of their holdings in the open market at a price closer to S$1.68 before the Scheme Meeting.




Eugene Chua OCBC Investment | http://www.ocbcresearch.com/ 2016-09-15
OCBC Investment SGX Stock Analyst Report ACCEPT OFFER Maintain ACCEPT OFFER 1.40 Same 1.400



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