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The Edge
22 July 2013
Veteran miner Joseph Gutnick seems to have a lot of explaining to do to shareholders of Singapore-listed Innopac Holdings and Australia-listed Merlin Diamonds.
On July 12, a A$59.4 million ($68.92 million) offer by Innopac to take over Merlin Diamonds failed, after Innopac was unable to garner the minimum 90% acceptance level required from Merlin's shareholders. As at the close of the offer, only 72.7% of Merlin's shareholders had accepted the offer. A second condition requiring some A$8 million worth of notes issued to ISR Investments to be converted into Merlin shares by the close of the offer was also not met. ISR is a shareholder of Innopac.
On Jan 31, Innopac said it would buy Merlin for 28 Australian cents a share. The offer price was a 36.6% premium to Merlin's stock price at the time. Innopac said it would pay for the acquisition by issuing 1.67 of its own shares for each Merlin share acquired. At the time, Innopac's shares were trading at a high of 24.5 cents, after experiencing a steep rally from a low of 2.4 cents in July last year.
Merlin chairman Gutnick, who owned 39.5% of the diamond miner at the time, had said in an interview with The Edge Singapore in February that he would accept Innopac's offer. On top of that, he said he was buying shares in Innopac on the market. He currently holds about 12% in Innopac.
The way Gutnick explained it, Innopac's takeover of Merlin would help the diamond miner gain easier access to capital. Merlin owns one of the largest and most productive diamond mines in Australia. Using funds from Innopac, Gutnick said he would conduct extensive exploration works at the mine, which he believes yields Australia's best quality stones. His target was for the mine to produce some 250,000 carats of diamonds by next year.
In fact, Gutnick said he intended to use Innopac to eventually acquire other diamond mining companies that might be strapped for cash, and provide them with capital raised in Singapore to help them grow.
Clearly, all this would have been music to the ears of Innopac's shareholders. The company was established in 1973 as the franchise owner of fast-food chain KFC in Singapore, which it later sold. In the 1990s, it was the global franchise owner for Shakey's Pizza. However, it sold this business in 2005 after becoming embroiled in a class action suit brought against it by dissatisfied Shakey's franchisees in the US. That left Innopac with a portfolio of Malaysian real estate and telecommunications assets, as well as various securities.
So, why didn't Innopac's acquisition of Merlin work out?
On the face of it, the problem seems to lie with Gutnick. According to media reports in Australia, he pared his stake in Merlin by selling shares at 20 to 22 Australian cents each to a number of individuals with links to Innopac in March. That's despite Innopac offering to buy Merlin at 28 Australian cents.
In total, Gutnick is reported to have sold a 37% stake in Merlin for A$12.5 million. The individuals linked to Innopac are now said to own 63% of Merlin. Shares in Merlin, which touched a high of 26 Australian cents in February, are now trading at 12 Australian cents.
These moves by Gutnick are reported to have drawn the attention of the Australian Securities and Investments Commission and the Australian Shareholders Association.
Where does all this leave investors in Innopac?
" As a result of the lapse of the offer, Innopac no longer has any interest in any Merlin Diamonds shares," the company says in a July 15 statement. Attempts to contact Innopac's managing director and CEO, Wong Chin Huan, were unsuccessful. Efforts to reach Gutnick were also unsuccessful. A spokesperson for Innopac says the company has nothing more to reveal following its statement. Shares in Innopac have tumbled 39% from their high in January to 14.9 cents on July 18.
22 July 2013
Veteran miner Joseph Gutnick seems to have a lot of explaining to do to shareholders of Singapore-listed Innopac Holdings and Australia-listed Merlin Diamonds.
On July 12, a A$59.4 million ($68.92 million) offer by Innopac to take over Merlin Diamonds failed, after Innopac was unable to garner the minimum 90% acceptance level required from Merlin's shareholders. As at the close of the offer, only 72.7% of Merlin's shareholders had accepted the offer. A second condition requiring some A$8 million worth of notes issued to ISR Investments to be converted into Merlin shares by the close of the offer was also not met. ISR is a shareholder of Innopac.
On Jan 31, Innopac said it would buy Merlin for 28 Australian cents a share. The offer price was a 36.6% premium to Merlin's stock price at the time. Innopac said it would pay for the acquisition by issuing 1.67 of its own shares for each Merlin share acquired. At the time, Innopac's shares were trading at a high of 24.5 cents, after experiencing a steep rally from a low of 2.4 cents in July last year.
Merlin chairman Gutnick, who owned 39.5% of the diamond miner at the time, had said in an interview with The Edge Singapore in February that he would accept Innopac's offer. On top of that, he said he was buying shares in Innopac on the market. He currently holds about 12% in Innopac.
The way Gutnick explained it, Innopac's takeover of Merlin would help the diamond miner gain easier access to capital. Merlin owns one of the largest and most productive diamond mines in Australia. Using funds from Innopac, Gutnick said he would conduct extensive exploration works at the mine, which he believes yields Australia's best quality stones. His target was for the mine to produce some 250,000 carats of diamonds by next year.
In fact, Gutnick said he intended to use Innopac to eventually acquire other diamond mining companies that might be strapped for cash, and provide them with capital raised in Singapore to help them grow.
Clearly, all this would have been music to the ears of Innopac's shareholders. The company was established in 1973 as the franchise owner of fast-food chain KFC in Singapore, which it later sold. In the 1990s, it was the global franchise owner for Shakey's Pizza. However, it sold this business in 2005 after becoming embroiled in a class action suit brought against it by dissatisfied Shakey's franchisees in the US. That left Innopac with a portfolio of Malaysian real estate and telecommunications assets, as well as various securities.
So, why didn't Innopac's acquisition of Merlin work out?
On the face of it, the problem seems to lie with Gutnick. According to media reports in Australia, he pared his stake in Merlin by selling shares at 20 to 22 Australian cents each to a number of individuals with links to Innopac in March. That's despite Innopac offering to buy Merlin at 28 Australian cents.
In total, Gutnick is reported to have sold a 37% stake in Merlin for A$12.5 million. The individuals linked to Innopac are now said to own 63% of Merlin. Shares in Merlin, which touched a high of 26 Australian cents in February, are now trading at 12 Australian cents.
These moves by Gutnick are reported to have drawn the attention of the Australian Securities and Investments Commission and the Australian Shareholders Association.
Where does all this leave investors in Innopac?
" As a result of the lapse of the offer, Innopac no longer has any interest in any Merlin Diamonds shares," the company says in a July 15 statement. Attempts to contact Innopac's managing director and CEO, Wong Chin Huan, were unsuccessful. Efforts to reach Gutnick were also unsuccessful. A spokesperson for Innopac says the company has nothing more to reveal following its statement. Shares in Innopac have tumbled 39% from their high in January to 14.9 cents on July 18.
0.146 now. can buy ???
Didn't stand up against selling at 14.5 cents. Now breakdown to 1.41 cents. Looks bad!
Xiang90 ( Date: 18-Jul-2013 21:08) Posted:
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see tml selldown lor, if can withstand 0.145 than maybe can buy. if drop below than dun touch better lol.. risky i believe
avid1980 ( Date: 18-Jul-2013 20:58) Posted:
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Innopac going downward? No more show?? Any advise?
wow .... what a see-saw... hope that it continues to be uptrend all the way to 2 and I dont have to cut loss :-)
will be nice to see the short sell report to know how many kateks at 159 )
may be test test water by shorting 1 lot ?
... (kidding)
guess many missing the boat waiting for the consolidation to come ?
B plan on the way,bb is plan b action ,but I don't buy it and use it as a leader of market direction after mirach,,,,guidosan
guess Innopac is probably not over yet ... I think ...
this BB seems to be a big picture BB ...
if it's the same BB that shorted big time from 225 till 111 ... guess they are probably gunning for very big meat ...
still observing ...
Thanks bro kelvinlim123, made $$$ on the u-turn. Huat ah!!!
Halcyon tyre puncture leh...
Halcyon tyre puncture leh...
kelvinLim123 ( Date: 16-Jul-2013 17:57) Posted:
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Rocky morning but looks like this found some momentum up..
Let's hope
Luckily I believed myself. Holding it at 0.0125. Huat Arr!
Ho bro Kelvinlim123, I'm still vested in Ramba... I find Ramba will only rock if dip below 0.60, Halcyon another disappointing performance, bought above 0.80 and haven't seen a rebound yet. Mirach to be seems near but still too far for me... Sian. Lets see how it goes tomorrow! Huat ah!
kelvinLim123 ( Date: 16-Jul-2013 17:57) Posted:
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could this head back up tp closer to 20, i don't know , i will use trailing to book my prfoit.
another one is TT int, never say never, wait till it soar.
Mirach cant believe myself, playing from 17c, make several round, another wonderful win here.
TT int next look good, halcyon, and kreuz,
ramba is about to u-turn, please take note........disclaimer, u buy u lose u sorrow, u win i hero.
Bought last wk 122, never stop out, luckily,bought and loaded more on the way up.
Big profit, sweet victory. hope you guy profit too.
Innopac - Opening - 0.118 Last done - 0.153cents +0.036cnets +30.8% Volume changed hands - 622,229,000
My third Kam Sia. Great Thor's hammer. Tua Tua Huat AH!!!!
aputako ( Date: 16-Jul-2013 16:19) Posted:
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Think BBs oso know how run road...(think so ONLY hohh). What TP maybe
A chance for players to load nad huat...argh and to...., errr...unload...???.
One door closed, anothers to open, it opening now..???.
Thk everyone, especially to Innopac players...Wish everyone huat huat...ARGHHH
BBs really, really make big move...Happi speculating.