Company Name: SC GLOBAL DEVELOPMENTS LTD
| Research House: Phillip Securities | Price Call: HOLD | Target Price: 1.80 |
SC Global is up 49.4% at $1.80 after its majority shareholder and CEO, Simon Cheong, Wednesday launched a $344.6 million, or $1.80/share, cash offer to take the company private, valuing the luxury residential developer at about $745 million.
While the offer is an estimated 37% discount to RNAV, it is a nearly 40% premium to the stock’s highest close of $1.29 over the past 12 months, Phillip Securities says in a note. SC Global’s completed projects The Marq on Paterson Hill and Hilltops, command high margins, but slow sales progress has dragged the company’s earnings, it says.
“We see a daunting task for the share price to close the gap to its RNAV of $2.87 at the current pace of sale. The current offer price of $1.80 presents a reasonable opportunity for its shareholders to (make) an early exit.” It raises its target to $1.80 from $1.15, but it keeps a Neutral call pending further details from the offering document.
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