SG: Viz Branz Limited - Bonus issue on hold

VIZ BRANZ LIMITED | HOLD 4 Sep 2012

BONUS ISSUE ON HOLD - Indication of interest signed - View as positive development - But upside limited; downgrade to HOLD In an update to its share sale announcement back in Jul, Viz Branz (VB) announced yesterday that its substantial shareholder and one of the potential interest parties had entered into a non-binding indicative preliminary letter of indication of interest (LOII) to facilitate the advancement of further discussions. Following this update, VB will put its proposed one-for-one bonus issue on hold to prevent any complications should the share sale eventually materialize. While the LOII is non-definitive and is generally non-binding, we view the update as a positive development in a potential share sale. As VB's share price increased 4% since our last report on 28 Aug (+113% on a year-to-date basis), we downgrade our rating to HOLD with an unchanged fair value estimate of S$0.74. In addition, we reiterate our view that should the share sale take place and an eventual takeover materializes, we are only anticipating a small premium of 2% (based on analysis of previous acquisitions/takeovers).