Wednesday, July 14, 2010

The battle has just began

The battle between Integrated Healthcare (IH) and RHC Healthcare (RH) means a windfall is awaiting for Keck Seng.

Five years ago Keck Seng invested in Parkway, and to date they have 35,583,218 shares in the company bought at an average price of S$0.82 per share. IH has a partial offer to buy Parkway at S$3.78 per share. Fortis is said to be giving a a full offer of S$3.80 per share.

Assuming that Keck Seng sell all their shares of Parkway to Fortis, they will make a capital gain of RM245 million at the exchange rate of one Singapore dollar to RM2.31.

The paid-up capital of Keck Seng is RM241,393,000. In view of this, the capital gain made is a big sum.

Keck Seng have lots of land in the Iskandar Region which have appreciated greatly and together with their investments in Wilmar, the stock is worth very much more than the last transacted price of RM5.20.

The problem with Keck Seng is that their major shareholders are very stingy. They give out very little to their minority shareholders. Nevertheless, at RM5.20 a share, Keck Seng is an excellent buy for the long term.