The Straits Trading Company Limited

Transcription

1 The Straits Trading Company Limited 16 January 2013 Extraordinary General Meeting

2 Responsibility Statement The directors of The Straits Trading Company Limited ( STC ) (including any who may have delegated detailed supervision of this investor presentation) have taken all reasonable care to ensure that the facts stated and all opinions expressed in this investor presentation are fair and accurate and that no material facts have been omitted from this investor presentation, and they jointly and severally accept responsibility accordingly. Where any information has been extracted or reproduced from published or publicly available sources (including, without limitation, in relation to WBL Corporation Limited ( WBL )), the sole responsibility of the directors of STC has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this investor presentation. Disclaimer This investor presentation should be read in conjunction with the full text of the possible offer announcement dated 26 November 2012 released by Standard Chartered Bank on behalf of STC, the full text of the announcement dated 26 November 2012 released by STC in relation to the Proposed Transactions and the circular dated 31 December 2012 ( Circular ) issued by STC in relation to the Proposed Transactions. Unless otherwise defined in this investor presentation, capitalised terms used herein shall have the same meanings as ascribed to them in the Circular. Shareholders are advised to read all the announcements and documents relating to the Proposed Transactions that have been or shall be released by STC in connection with the Proposed Transactions, copies of which may be obtained from the SGX-ST website ( 2

3 Section I Introduction

4 Introduction On 26 November 2012, The Straits Trading Company Limited ( STC or the Company ) announced that it had entered into two separate conditional stock purchase agreements with Aberdeen Asset Management Asia Limited (acting in its capacity as fund manager and agent for its clients) ( Aberdeen ) and certain funds and portfolios managed by Third Avenue Management LLC ( Third Avenue Vendors ) for the purchase of up to approximately 23.58% of the total issued WBL Stock Units 1 Proposed Transactions subject to STC s shareholders approval Upon approval of STC s shareholders, Standard Chartered Bank on behalf of STC will announce a mandatory conditional general offer for all the remaining stock units of WBL not already owned, controlled or agreed to be acquired by the Company and parties acting in concert with the Company ( Offer ) Proposed Acquisitions are in line with STC s Transformation Strategy Existing minority shareholding in WBL (c.17.0%) to be transformed into a strategic stake in WBL (c.44.5% stake held by STC together with its concert parties) Note: (1) Based on the total number of issued WBL stock units of 271,499,751 as at 24 December

5 Summary of the Proposed Transactions Proposed Acquisitions Offer Potential Maximum Cash Outlay Key Approvals Proposed acquisition of up to approximately 23.58% stake 1 in WBL from Aberdeen and Third Avenue Vendors 1.07 new STC shares as consideration for each WBL stock unit (up to 68.5m new STC shares to be issued to Aberdeen and Third Avenue Vendors) No cash outlay The mandatory conditional general offer for all WBL stock units not already owned, controlled or agreed to be acquired by the Company and its concert parties Offer Price: 1.07 new STC shares for each WBL stock unit, as adjusted in accordance with the terms of the Offer ( Share Consideration ); or S$3.41 in cash for each WBL stock unit, as adjusted in accordance with the terms of the Offer ( Cash Consideration ) Up to S$547 million based on the Cash Consideration of S$3.41 per WBL stock unit and assuming (i) 100% acceptances of the Offer and the Convertible Bonds Offer, and (ii) all WBL Stockholders and WBL Bondholders elect the Cash Consideration and Bonds Offer Cash Consideration respectively SGX-ST s approvals on Circular and listing of new STC shares (obtained on 24 December 2012) STC s shareholders approvals for the Proposed Acquisitions, the Offer and the Convertible Bonds Offer and issuance of new STC shares The Proposed Transactions comprise of (1) the Proposed Acquisitions and (2) the Offer and the Convertible Bonds Offer Note: (1) Based on the total number of issued WBL stock units of 271,499,751 as at 24 December

6 Section II Rationale for the Proposed Transactions

7 Rationale for the Proposed Transactions Proposed Acquisitions in line with STC s Transformation strategy Broadening of STC s investor base Potential for continued growth in WBL WBL CORPORATION LIMITED Allows WBL earnings to be accounted in STC s 5 3 financials 4 Well positioned to work closely with WBL Board to unlock value Reasonable acquisition price 7

8 2 Potential for Continued Growth in WBL WBL CORPORATION LIMITED Market capitalization: S$1,086m 1 Gross debt: S$558m 2 Revenue: S$2,464m 2 Net profit to stockholders: S$75m 2 Stockholders equity: S$944m 2 Automotive Property Technology Engineering & Distribution Others Description Automotive distributor in Singapore, Malaysia, Hong Kong, Indonesia and Thailand representing 11 premium brands Prestige Division comprises super luxury marquees of Bentley, Bugatti and McLaren More than 20 years in property development in China Strong track record of 28 developments totaling 2,320,000 sq m More than 95% of launched residential units sold and commercial spaces fully leased as at the end of FY2011 NASDAQ-listed MFLEX (57% owned) and SGX-listed MFS Technology (77% owned) are major players in the FPC and PCB industries MFLEX is among the top 3 providers of flexible circuit boards for top selling smartphone models 3 Systems integrator for broadcasting and multimedia, communications and IT, security and surveillance industries Supplier and distributor of construction materials; sand mining, commercial laundry and industrial equipment, etc Property management Production and distribution of agrotechnology and bioelectronic products Investments in financial services and IT companies Provision of management and financial services to related companies FY12 Revenues FY12 Segment Results S$892m S$143m S$1,246m S$136m S$47m S$29m S$11m S$61m S$11m S$(0)m Portfolio of leading businesses automotive distribution, property development and MFLEX Note: (1) Market capitalisation based on total outstanding WBL stock units of 271,499,751 as at 24 December 2012; (2) Based on the unaudited financial statements of WBL for the financial year ended 30 September 2012; (3) MFLEX investor presentation November

9 3 Well Positioned To Work Closely With WBL Board To Unlock Value WBL Stock Price (S$) Stock Price 1 (S$) Absolute return since 24 Nov 2004 Latest traded price % 52 W High % 52 W Low % Note: (1) Based on data extracted from Bloomberg on 23 November Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 STC to emerge as largest WBL stockholder post the Proposed Acquisitions and will be well positioned to work closely with the WBL board to pursue initiatives to unlock stockholder value STC has a track record of transforming and repositioning businesses % Stockholding Before the Proposed Acquisitions 2 After the Proposed Acquisitions 3 STC 17% 41% Tecity 4% 4% Third Avenue Vendors 16% 0% Aberdeen 7% 0% Others 55% 55% Total 100% 100% STC would have a stockholding of 46% to 96% if the Offer is successful Note: (2) Stockholding percentage based on total WBL stock units outstanding of 271,499,751 as at 24 December 2012; (3) Assumes that the Proposed Acquisitions have been completed 9

10 4 Reasonable Acquisition Price Value Comparisons Consideration vs. Historical WBL Stock Prices 1 (S$) Offer Price Book Market Based Offer price premium / (discount) -2.0% -2.8% -3.4% -4.5% -2.0% 9.6% -11.4% 24.0% 11.8% 10.8% 10.2% 9.0% 11.8% 25.1% 1.0% 41.5% Value of consideration WBL net assets Last traded WBL price 1 month WBL VWAP 3 month WBL VWAP 6 month WBL VWAP 12 month WBL VWAP 52 week high 52 week low Value of the Cash Consideration and Share Consideration as at the Last Trading Date (23 November 2012) Value of the Share Consideration as at the Latest Practicable Date (24 December 2012) Note: (1) Benchmark WBL stock prices as at 23 November 2012; (2) Net assets calculated as stockholders equity based on the unaudited financial statements of WBL for the financial year ended 30 September 2012, divided by total issued WBL stock units of 271,152,261 as at 23 November

11 5 Allows WBL Earnings To be Accounted In STC s Financials STC s EPS After the Proposed Acquisitions 1,3 (S$ cents) STC s EPS After the Proposed Transactions 2,3 (S$ cents) FY11 EPS Proforma FY11 EPS FY11 EPS Proforma FY11 EPS STC would be able to account for WBL as an associate upon completion of the Proposed Acquisitions STC would be able to account for WBL as a subsidiary in the event STC holds >50% stake in WBL at the close of the Offer The resultant financial effects are expected to be positive on a historical pro forma basis WBL would be accounted for as either a subsidiary or an associate in STC s financials Note: (1) Assuming that the Proposed Acquisitions have been completed; (2) Assuming that the Proposed Acquisitions have been completed, and the Offer and the Convertible Bonds Offer are accepted in full only by way of the share consideration; (3) Based on WBL s FY2012 results and STC s FY2011 audited accounts 11

12 6 Broadening of STC s Investor Base STC Shareholder Base % Shareholding Before the Proposed Transactions 1 After the Proposed Acquisitions 2 After the Proposed Transactions 3 Tecity 89% 73% 51% Others 11% 9% 37% Third Avenue Vendors 0% 12% 8% Aberdeen 0% 6% 4% Total 100% 100% 100% Set up in 1992 Founded in 1986 Manages a total of US$112.2 billion 4 Singapore-based Asia Pacific headquarters of the Aberdeen Group, a specialist asset management company listed on the LSE c.us$12 billion of funds under management 5 U.S.-registered investment adviser based in New York Aberdeen and Third Avenue Vendors will be substantial shareholders of STC upon completion of the Proposed Acquisitions In-line with STC s long term strategy to increase investor base and increase liquidity in STC shares Proposed Acquisitions allows addition of two well respected, long term institutional investors into STC shareholder base with no cash outlay and enables STC to maintain prudent gearing level even with Offer Note: (1) Based on 325,897,000 STC shares in issue as at 24 December 2012; (2) Based on 394,397,775 STC shares in issue, assuming that the Proposed Acquisitions have been completed; (3) Based on 566,112,587 STC shares in issue, assuming that the Proposed Acquisitions have been completed, and the Offer and the Convertible Bonds Offer are accepted in full only by way of the share consideration; (4) As at 30 September 2012; (5) As at 31 October

13 Thank You