SC Global Developments' shares rose 8.5 per cent yesterday on news that Wheelock Properties had raised its stake in the Simon Cheong-controlled company through the purchase of 1.067 million shares.
The stock shot to an intra-day high of $2.06 before closing at $1.975, up 15.5 cents on the day. Shares in Wheelock, whose stake in SC Global inched up to about 16.09 per cent following the open-market acquisition of additional shares, closed 6.5 cents, or 3.3 per cent, higher at $2.04.
Wheelock's purchase price of about $1.81 a share is a shade higher than the $1.80 that Mr Cheong is offering to take SC Global private.
"We believe that Wheelock is raising its stake in SC Global for a higher offer as the current offer price is still below their initial investment cost," UOB-Kay Hian said in a report yesterday.
Wheelock said late on Thursday that "in our assessment, the current share price represents a discount of some 40-50 per cent of RNAV (revalued net asset value), and we would be unable to buy property assets directly at anything like these prices". SC Global ended trading at $1.82 on Thursday.
Wheelock Properties, formerly known as Marco Polo Developments, is a subsidiary of Wheelock and Company Ltd, a major Hong Kong group.
In a statement yesterday advising shareholders to exercise caution when dealing in shares of the company, SC Global said that "statements by various stakeholders on their assessment of the offer . . . are likely to be personal to the writers or persons who had expressed them, and might not have taken into account the individual circumstances and needs of the readers".
"Shareholders are advised to treat with caution any figures or other data provided by third parties who are not in possession of property-specific details pertaining to each of the assets and liabilities of the company," it said.
Analyst estimates of SC Global's RNAV vary widely. AM Fraser values it at $1.98 a share, DMG and Partners Security at $3.65, and Maybank Kim Eng at about $4.00.
SC Global has appointed PrimePartners Corporate Finance as independent financial adviser to the company's independent directors on the offer.
An analyst, who declined to be named, said: "There's a lot of upside in the RNAV. Obviously, you can't expect them to get 100 per cent of the RNAV payout. Allgreen's the most recent and relevant, (and was taken private) at about 19 per cent discount, which would suggest that a pricing of mid- to high-$2 as fair value here. Given that Simon Cheong has a majority stake, you probably can't get that, but we still think (a fair offer price) should be above $2."