The put / call option will expire around sep/oct 06. This will allow Sime Darby to acquire an additional 15% in Jaya holding at $1.20.
If the price of Jaya Holding stays above $1.20, Sime Darby will exercise the call at $1.20. This will trigger a takeover offer for existing shares as they are holding 29.9% stake currently.
Well, if price stays below, chances are Sime Darby will still exerice the option. Because, Jaya has a growth prospect for the next 3 years. Also , the market will not have 15% stake for Sime Darby to acquire.
The question is: How much will Sime Darby offer for Jaya's share?
With its ability to generate postive cash flow, and its current cash holding, i predict Sime Darby will offer $1.30 - 1.50 for jaya.
If the price of Jaya Holding stays above $1.20, Sime Darby will exercise the call at $1.20. This will trigger a takeover offer for existing shares as they are holding 29.9% stake currently.
Well, if price stays below, chances are Sime Darby will still exerice the option. Because, Jaya has a growth prospect for the next 3 years. Also , the market will not have 15% stake for Sime Darby to acquire.
The question is: How much will Sime Darby offer for Jaya's share?
With its ability to generate postive cash flow, and its current cash holding, i predict Sime Darby will offer $1.30 - 1.50 for jaya.
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