Temasek Holding and GLCs - from Left Pocket to Right
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Why is Temasek Holdings paying $2.82 BILLION to buy back all the shares of Neptune Orient Line, when it had declared to divest itself from all ownership of viable GLC operations ?
If one is to relook at all the reported outflow of funds from Temasek Holdings for 2004 alone, one can only wonder if there is a bottomless depth in Temasek's pocket:
29 January 2004 - Temasek pay US$45million for 7.5% stake in India's Supply Chain Manager.
18 February 2004 - Temasek pay S$43.7million for an increase of 0.56% stake in India's ICICI Bank, raising its shareholdings from 6.72% to 7.28%.
3 March 2004 - Temasek pay US$765.8million for 5% stake in Malaysia's Telekoms.
(No follow-up during March 2004 to August 2004, anyone who did ? )
Temasek's NOL offer 'fair but not compelling'
HSBC advises investors to keep holdings if they are confident of long-term prospects but says those wishing to sell could do so if the market price was higher
By Nicholas Fang
TEMASEK Holdings' $2.82-billion cash offer for all the shares of Neptune Orient Lines (NOL) that it does not already own is 'fair but not compelling', said NOL independent financial adviser HSBC.
In a circular issued to shareholders yesterday, HSBC said that shareholders who wished to realise their investment in NOL immediately should consider selling their shares on the open market if they can obtain a higher price than Temasek's offer price.
However, shareholders who are 'confident of the long-term prospects of the group' were advised to retain their shares and not accept the offer.
Temasek Holdings stunned the market earlier last month when it announced its offer for NOL at $2.80 a share.
The Singapore investment company announced the offer after buying NOL shares on the open market and pushing its stake past the 30 per cent mark that triggers a mandatory takeover offer under corporate laws.
HSBC said that factors in favour of the Temasek offer included the fact that the offer price of $2.80 per share is higher than any adjusted daily closing price in the period since NOL's acquisition of its APL liner arm in 1997 up to the offer announcement date.
'The premium of the offer price over the historical share price of NOL in the observation period we have selected is in line with that of selected tender offer transactions in Singapore,' HSBC said.
However, it also noted that the adjusted daily closing price for NOL in the period since the date the offer was announced up to the latest practicable date has consistently exceeded the offer price.
The shares have closed above Temasek's $2.80 bid price every day after the offer was announced.
HSBC also said Temasek's offer valued the 36-year-old shipping line at a price-to-earnings multiple which was below the mean and median of comparable companies.
It recommended that shareholders who wished to realise all or part of their investment in NOL now, but were unable to obtain a price higher than the offer price on the open market, could consider accepting Temasek's offer.
A Temasek spokesman said yesterday: 'The opinion in the NOL circular has no new and material information on the company.
'We recommend that all NOL shareholders carefully read the independent financial adviser's opinion and the NOL board's recommendation based on the appropriate investment horizons.
'We wish to reiterate that our offer of $2.80 a share is an all-cash, firm offer, which closes on Sept 15 at 3.30pm.'
HSBC noted that NOL had said that, should APL be reclassified by the United States government as a controlled carrier if Temasek's stake in NOL edged above 50 per cent, the financial impact on NOL is unlikely to be material.
It said that NOL had told them that in the event of a loss of business due to such a reclassification, the financial impact would be immaterial as assets involved could be redeployed to serve other customers or trades.
NOL shares ended yesterday three cents lower at $2.82 per share with 3.95 million shares changing hands.
This news report was published in the Straits Times dated 3 September 2004, which will be archived after three days.
http://straitstimes.asia1.com.sg/money/story/0,4386,270317-1094075940,00.html? -
so what u trying to tell us?
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They get things at cheap rate or good time...
Now got 1 executive in the cabinet... Against 1 rule -
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Yah! ATOBE care to eloborate on what you read in this Temasek-NOL issue?
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If the billions Temasek Holding are strategically invested in the domestic economy, Singaporeans will all be fully employed and the country will prosper in no time.
By investing these monies like what Fund Managers are doing passively from the ivory towers of annual reports and audits, the visions are not sharp. When there is a major crisis, funds may be lost due to general downturns.
This ability to read mega trend has affected the biggest players and shrewdest businessmen in the world. Has Temasek management that visions to read fine print and true company efficiency and productivity to escape from such potential pitfall due to movements of mega trend?
To begin with I suggest transferring all extraordinary investment windfalls or profits to safer baskets like people's piggie banks 1 (medishield) 2 (retirements) and 3 (education)
After all if Singapore is going to be a non-government but business entity, citizens should be paid dividends from investments in various overseas companies. Fair and square don't you think? -
Where is the source of the funds that Temasek Holdings utilise for all the overseas and local buying binge ?
If Temasek Holdings has excess funds, should this funds not be returned to the Treasury, and build up the Singapore National Reserves ?
After the Executive President of Temasek, had declared that Temasek Holdings will divest itself of all involvement in Government Linked Companies, it is surprisng that Temasek is getting deeper into a GLC - such as this Neptune Orient Line that is the subject of a complete buy out of all shareholders.
It is not that NOL is financially cash strap and need to be bail out of any financial difficulties, which require Temasek to inject such a huge sum to take over NOL.
What is the reason for "injecting" $2.8 BILLION into the system ?
Is this some professional game in clever accounting, or window dressing, or some kind of shell game to move funds around - so that no funds that remain idle for too long will be required to be returned to the Treasury ?
From the Left Pocket, into the Right Pocket, and then out of the zipper ? -
On the NOL invesment, my guess on the additional sum in is that Temasek probably has some new strategic frame where NOL plays the role of an important chess piece.
The investments in rising power such as India also comes as no surprise as we have long been aware on existing policies to 'develop' yet new pools of bilingual and bi-cultural adept talents who will be able to provide expertise support in dealings with rapidly developing economic engines such as India and China.
The areas of economic penetration made by Temasek Holdings in this case is also very typical as with its previous investure strategy, which as we may see, is characterised by hitting banks AND telecommunication again in this recent round.
This normality of the move appears very much inline with the typical and routine 'Temasek' style of expansion, which I believe, has long been planned, with funds gathered long before plan execution and risks carefully assessed and monitored.
The time for launch was probably only subjected to having the right external legal-political and economic conditions to carry out implementation.
So for me, I reckon I won't really be losing much sleep over the probability of losses made.
But just to add on what robertteh had earlier commented on sharing the sweets from investment dividends, now that would certainly be an interesting area to look out for. -
As usual Atobe is blind to the facts before him and oppose for the sake of opposing and opposing everyone who oppose him and wanting to be right and win every arguement every time.
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Must you take your private vendetta into every thread here?Originally posted by paperchicken:As usual Atobe is blind to the facts before him and oppose for the sake of opposing and opposing everyone who oppose him and wanting to be right and win every arguement every time. -
Thats a reply to each of his thread. He stand is the same in all the thread oppose for the sake of opposing so my ans is the same. Its nothing personal.Originally posted by [ Neo ]:Must you take your private vendetta into every thread here? -
Originally posted by [ Neo ]:
Nothing to fret about, it is only a hair brained chicken thinking he is made of paper.
Must you take your private vendetta into every thread here?
Or is it a paper thinking he is made into a chicken ? -
Originally posted by [ Neo ]:
Is this strategy of buying back shares from shareholders of Government Linked Companies - an expansion strategy ?
On the NOL invesment, my guess on the additional sum in is that Temasek probably has some new strategic frame where NOL plays the role of an important chess piece.
The investments in rising power such as India also comes as no surprise as we have long been aware on existing policies to 'develop' yet new pools of bilingual and bi-cultural adept talents who will be able to provide expertise support in dealings with rapidly developing economic engines such as India and China.
The areas of economic penetration made by Temasek Holdings in this case is also very typical as with its previous investure strategy, which as we may see, is characterised by hitting banks AND telecommunication again in this recent round.
This normality of the move appears very much inline with the typical and routine 'Temasek' style of expansion, which I believe, has long been planned, with funds gathered long before plan execution and risks carefully assessed and monitored.
The time for launch was probably only subjected to having the right external legal-political and economic conditions to carry out implementation.
So for me, I reckon I won't really be losing much sleep over the probability of losses made.
But just to add on what robertteh had earlier commented on sharing the sweets from investment dividends, now that would certainly be an interesting area to look out for.
This practise of buying back of shares, from public shareholders, is not only limited to Neptune Orient Lines, but has also been implemented into the previously public listed Keppel Shipyard; and (correct me if I am wrong) also with Singapore Telecoms, Chartered Industries, Sembawang Shipyard, Far East Levingston.
The "Privatisation " of these Government Linked Companies are not going into the hands of the PRIVATE SECTOR, but into the "Private Hands" of Government approved entities or personalities.
With the buying back of shares that are in the hands of the Pulic, it will result in less public disclosure of the annual accounts and performance of such companies that are largely set up with Public Funds.
With the changes made to legislations governing the requirement of company auditing policies, it open the door to alot more flexibility in Holding Companies moving assets and funds. -
Technically speaking, the buying back of shares could be a part of an expansion strategy. I mean companies will naturally seek to first increase on their degree of influence and control over any entity that has a vital role to play in some grand plan.Originally posted by Atobe:Is this strategy of buying back shares from shareholders of Government Linked Companies - an expansion strategy ?
This practise of buying back of shares, from public shareholders, is not only limited to Neptune Orient Lines, but has also been implemented into the previously public listed Keppel Shipyard; and (correct me if I am wrong) also with Singapore Telecoms, Chartered Industries, Sembawang Shipyard, Far East Levingston.
The "Privatisation " of these Government Linked Companies are not going into the hands of the PRIVATE SECTOR, but into the "Private Hands" of Government approved entities or personalities.
With the buying back of shares that are in the hands of the Pulic, it will result in less public disclosure of the annual accounts and performance of such companies that are largely set up with Public Funds.
With the changes made to legislations governing the requirement of company auditing policies, it open the door to alot more flexibility in Holding Companies moving assets and funds.
The policy of GLC privatization may have announced, but having played the role of the ‘Guiding Hand’ in these companies for so many year, divesture moves would also have vital concerns e.g the competence, track record and ability of a potential new buying company to safely maintain and ensure on the continuous going on concern of a Temasek sell off company.
If privatization has to be made at the expense of the management incompetence by a new buying company just for the surface meeting of the privatization objective, then I would rather see Temasek to continue holding on to all of its current portfolio than to hear news of further retrenchment exercise or layoffs - resultant from declining business or bad management though I would personally also hope to see more privatization cases to go on.
And if it is any consolation to us, at least we have seen the sell off of at least one company, CIAS, by the holding company this year.
Back to the recent purchase made by Temasek, most of these targets were actually aimed at corporations which have already had plans mapped out for business growth in promising industries overseas.
If Temasek’s recent increased involvement in these purchases could provide a helping hand be it – business intelligence sharing, corporate expertise or resource sharing, all leading to the creation of more jobs for the local scene, then why not support this move?
As for the disclosure of financial statements and performance, that I guess we may only be able to make assessment upon only after we have seen what has been made know to public when the annual reports have been published. -
Originally posted by [ Neo ]:
Frankly, I do not see how the buying back of shares from the Public can be seen as an act expansion.
Technically speaking, the buying back of shares could be a part of an expansion strategy. I mean companies will naturally seek to first increase on their degree of influence and control over any entity that has a vital role to play in some grand plan.
The policy of GLC privatization may have announced, but having played the role of the ‘Guiding Hand’ in these companies for so many year, divesture moves would also have vital concerns e.g the competence, track record and ability of a potential new buying company to safely maintain and ensure on the continuous going on concern of a Temasek sell off company.
If privatization has to be made at the expense of the management incompetence by a new buying company just for the surface meeting of the privatization objective, then I would rather see Temasek to continue holding on to all of its current portfolio than to hear news of further retrenchment exercise or layoffs - resultant from declining business or bad management though I would personally also hope to see more privatization cases to go on.
And if it is any consolation to us, at least we have seen the sell off of at least one company, CIAS, by the holding company this year.
Back to the recent purchase made by Temasek, most of these targets were actually aimed at corporations which have already had plans mapped out for business growth in promising industries overseas.
If Temasek’s recent increased involvement in these purchases could provide a helping hand be it – business intelligence sharing, corporate expertise or resource sharing, all leading to the creation of more jobs for the local scene, then why not support this move?
As for the disclosure of financial statements and performance, that I guess we may only be able to make assessment upon only after we have seen what has been made know to public when the annual reports have been published.
If anything at all, it is utilising precious financial resources to pay to the Public for the shares that they have, when the same financial resources could have the Company by being put into better investment use elsewhere.
The buying back of the shares can only be seen in the most cynical view - in that after using the private funds of Singaporeans to build up the GLC, and having grown the GLC to a certain size, the Government now decide to dispense with the Singapore Citizens' money - by seemingly returning a higher value for the shares that they have held for so long.
Why not let the Singapore Citizen hang on to these shares and sell it at a later date to the open market - especially if the growth prospect can see the Company Share value reaching ever higher levels in the Stock Exchange ?
Keppel Shipyard bought back the shares from mainly Singaporean Shareholders, at a price that give only a slight premium above the prevailing market price.
After having gain 100 percent control of the Company, Keppel Shipyard changed its name into Keppel Corporation, and went into property development - using the asset endowed land on which the Shipyard had been sitting, to gain higher revenue from the sale of an upmarket property development.
Could the Singapore Citizen Shareholder have benefitted more by hanging on to those shares ?
With regards to the many overseas acquisition of shares to allow Temasek a stake in the foreign business entities, it can hardly generate any new jobs in Singapore unless the foreign business entities happen to open a subsidiary unit in Singapore.
Does Temasek have any say or influence on the Board of these foreign companies, when Temasek's shareholding is just a bean size when compared to the humongous share values of these Companies ? -
Hi Neo & Atobe
The 2 of you seem rather well versed with corporate businesses! A version I heard was that Temasek was trying to churn the market for the benefit of LHL's ascension. What do you think?
regards
raihan -
pot calling a kettle blackOriginally posted by Atobe:Nothing to fret about, it is only a hair brained chicken thinking he is made of paper.
Or is it a paper thinking he is made into a chicken ?
besides that
i still dun get the arguement the thread starter is trying to make though
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Originally posted by raihanraihan:
No need to be "well versed with corporate businesses", but just using logic to assess a normal business situation.
Hi Neo & Atobe
The 2 of you seem rather well versed with corporate businesses! A version I heard was that Temasek was trying to churn the market for the benefit of LHL's ascension. What do you think?
regards
raihan
"Churn the market" by buying back shares from the open market or from existing shareholders ?
This only produce a short term effect with a LONG TERM OBJECTIVE of CLOSING DOWN A PROFITABLE PUBLIC COMPANY, with future profits being in the exclusive control of Temasek Holdings - and further tightening on NON-ACCOUNTABILITY of all its investments. -
Originally posted by shoutcast:
"pot calling a kettle black" and still "dun get the argument the thread starter is trying to make though" ?
pot calling a kettle black
besides that
i still dun get the arguement the thread starter is trying to make though
No one can help you if you can only see "pots and kettles" being black.
Are you sure if you even want to be here, if you cannot even grasp issues that have already developed way over your level of understanding of "pots and kettles" ?
Maybe "Aunt Agony" can help you..... -
Well, like what Atobe had said, I'm no corporate wizard either. It's only a matter of following up on news and piecing them together.Originally posted by raihanraihan:Hi Neo & Atobe
The 2 of you seem rather well versed with corporate businesses! A version I heard was that Temasek was trying to churn the market for the benefit of LHL's ascension. What do you think?
regards
raihan
As for the 'version' that you have mentioned. Personally, I don't buy the story of market 'churning' for the new PM.
Yes. Temasek Holding hold a leading role in shaping of industry standards and superinfrastructural developments in Singapore. But they have been doing so ever since incorporation in 1974.
In fact, the company had been leading the domestic economic scene when both MM Lee and SM Goh were serving as PM previously, and they will still continue to do so in the times of the new PM - irregardless of name.
Hence, based on this historical trend, my personal view is that the rumour is unsubstantiated and baseless in objectivity.
If you were to say that Temasek is extending its claws out for Singapore to gain a leadership position in the global environment, yes then I will share that view.
But for any single individual amidst the eyes of global business and industry leaders??
Nah. I dun think so. -
You have raised good and thought provoking points above - especially on the Keppel Shipyard example, and I can understand and share the point there.Originally posted by Atobe:Frankly, I do not see how the buying back of shares from the Public can be seen as an act expansion.
If anything at all, it is utilising precious financial resources to pay to the Public for the shares that they have, when the same financial resources could have the Company by being put into better investment use elsewhere.
The buying back of the shares can only be seen in the most cynical view - in that after using the private funds of Singaporeans to build up the GLC, and having grown the GLC to a certain size, the Government now decide to dispense with the Singapore Citizens' money - by seemingly returning a higher value for the shares that they have held for so long.
Why not let the Singapore Citizen hang on to these shares and sell it at a later date to the open market - especially if the growth prospect can see the Company Share value reaching ever higher levels in the Stock Exchange ?
Keppel Shipyard bought back the shares from mainly Singaporean Shareholders, at a price that give only a slight premium above the prevailing market price.
After having gain 100 percent control of the Company, Keppel Shipyard changed its name into Keppel Corporation, and went into property development - using the asset endowed land on which the Shipyard had been sitting, to gain higher revenue from the sale of an upmarket property development.
Could the Singapore Citizen Shareholder have benefitted more by hanging on to those shares ?
With regards to the many overseas acquisition of shares to allow Temasek a stake in the foreign business entities, it can hardly generate any new jobs in Singapore unless the foreign business entities happen to open a subsidiary unit in Singapore.
Does Temasek have any say or influence on the Board of these foreign companies, when Temasek's shareholding is just a bean size when compared to the humongous share values of these Companies ?
On the lower section concerning how the acquisition of shares in foreign business entities could help generate business and employment opportunities here in Singapore, my trust in the phenoma is based mainly on the principal of Business Migration and Business Intelligence.
Hypotetically speaking, when we have Temasek entering into anything foreign, the initial gains that will be made would not be immediate monetary profits or a dominating market share upfront.
We would in fact, be more interested to gain learnings on matters such as a foreign country's internal domestic economic conditions, commercial trading conditions, the identification of their successful and reputable corporations who might hold the potential of posing threats to certain SG incorporated who might be operating within the same theatre.
For foreign entities identified with investment potential, the business intel could be passed to IE Singapore, who would then initate wooing efforts to target these foreign firms to set up subsidaries here in SG - as you have mentioned earlier too.
Similar but of an alternate flow, the entering into business and industrial activites overseas, we might also attract smaller foreign companies to volunteeringly shift core business activites over to SG as they would also be keen to be closer to there the heart of action is (SG being Temasek's HQ).
When this happens, we would have job creation all the same too. Sure the SMEs will face increased challenge, but in our era, there are no longer any avenue for escape away from Globalization.
The above process is of course not a direct one, but the eventual benefits will flow into SG and potentially benefit us in an indirect manner.
By participating in foreign superinfrastructural developments via mergers, JVs or whatever we have, Temasek would also have gained first hand knowledge on a foreign government's plans for any selected geographical region.
When we have access to such infrastructure blueprints - made available either because these had been communicated by the foreign goverment or even drafted up internally by the merged or JV company, we will then KNOW what tricks or changes that our surrounding economic engines might be habouring.
By knowing the type of investments made, the degree of sophistication, the amount of investments poured in as well as the project's team of international participation, SG as a whole, will then at least have a greater frame of time to be prepared and to pre-empt and disarm any form of potential economic risk/threats to us.
That, will help to preserve jobs locally. -
[Neo] many thanks for your keeness in this topic, and the points raised in Temasek's agenda. Somehow, it seems a very heavy price to pay, simply to garner information, or gain an insight to the plans of foreign government, or for that matter to invest in foreign countries with the long term view of getting some companies to relocate into Singapore - and hence, creating jobs in Singapore.
As much as these COULD POSSIBLY be the objectives of Temasek Holding, it is unfortunate that my cynical nose smell something deeper in the manner that Temasek has thrusted its investment overseas.
For a different angle to reading Temasek's methods, perhaps this article may help this discussion further.
http://www.singapore-window.org/sw02/021107at.htm -
This alarming thread was spotted, and the picture seems more complete and relevant to the current thread here, as seen from the article that was posted and now repeated here:-
SINGAPOREANS DO U WANNA BE LED BY THE NOSE?Originally posted by scorps125:
http://www.sgforums.com/?action=post&thread_id=92713&q_post_id=2133745
[b]http://www.bigo.com.sg/fooled/fooled.html
Refer to the above link for interesting artcles and judge for urself.[/url][/b] -
WARNING !
Some ppl here do not have the require depth and understanding to discuss the issues involved. They are just distorting the facts. Do not be misled by them. -
Originally posted by tspg:
So, other "ppl here do not have the require depth and understanding to discuss the issues involved" ?
WARNING !
Some ppl here do not have the require depth and understanding to discuss the issues involved. They are just distorting the facts. Do not be misled by them.
Is this a back handed compliment to yourself, that you have the depth of understanding of this thread and the articles posted, which make you of sufficient authority to delcare that others have no such depth ?
How are the facts being distorted ?
Which item in the posts is an attempt to mislead Singaporeans, or more specifically the participants in this sgForum ?
In the first place are you qualified enough even to pass comments of other people's effort in this forum ?
Secondly, with your consistent performance in knee jerk defense of the Ruling Party, each time when there are criticism of them, will you declare yourself if you are truly a NSP member, or actually a member from the Ruling Party pretending to be a NSP member ?
I wonder if this second question is of any use, when you have been so misleading as to play with the emotions of some weak and gullible participants, who actually believe in your cheap "good-bye" show to get some sympathetic support - when you have been exposed as a 'charlatan' - a term which your "mentor" has used towards others.