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The Keppel sale of its 45.51% stake in SPC to PetroChina for S$1.45bn took many by surprise given that it was believed that Keppel was in no hurry to sell that stake. Before you decide what to do with your SPC shares you should wait for the IFA report from SPC which should have some analysis on the merits of the deal. Meanwhile, let me give my gut feel view of the offer. Its at a 25% premium to Friday's close of $5.04 and a 50.5% premium to the one month volume weighted average price. So on paper looks good.
My approach is that an acquisition by a strategic investors usually goes beyond straight financial ratios. From the charts below - an acquisition price of $6.25 roughly equates to crude oil hitting more than US$90 per barrel. Its hard to see this happening before 2011. So to me its a good price and investors should accept it given the expected weak recovery in the Global economy. Read more...[caption id="attachment_2549" align="alignright" width="150" caption="Photo from Kevin Scully Blog"]
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The Keppel sale of its 45.51% stake in SPC to PetroChina for S$1.45bn took many by surprise given that it was believed that Keppel was in no hurry to sell that stake. Before you decide what to do with your SPC shares you should wait for the IFA report from SPC which should have some analysis on the merits of the deal. Meanwhile, let me give my gut feel view of the offer. Its at a 25% premium to Friday's close of $5.04 and a 50.5% premium to the one month volume weighted average price. So on paper looks good.
My approach is that an acquisition by a strategic investors usually goes beyond straight financial ratios. From the charts below - an acquisition price of $6.25 roughly equates to crude oil hitting more than US$90 per barrel. Its hard to see this happening before 2011. So to me its a good price and investors should accept it given the expected weak recovery in the Global economy. Read more...
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The Keppel sale of its 45.51% stake in SPC to PetroChina for S$1.45bn took many by surprise given that it was believed that Keppel was in no hurry to sell that stake. Before you decide what to do with your SPC shares you should wait for the IFA report from SPC which should have some analysis on the merits of the deal. Meanwhile, let me give my gut feel view of the offer. Its at a 25% premium to Friday's close of $5.04 and a 50.5% premium to the one month volume weighted average price. So on paper looks good.
My approach is that an acquisition by a strategic investors usually goes beyond straight financial ratios. From the charts below - an acquisition price of $6.25 roughly equates to crude oil hitting more than US$90 per barrel. Its hard to see this happening before 2011. So to me its a good price and investors should accept it given the expected weak recovery in the Global economy. Read more...
